History has shown that stocks, bonds and cash behave differently over time. By diversifying your holdings across different investments, you can lessen the effects of market cycles and increase the chances that some portion of your portfolio will always be in favour.
Asset allocation is the time-proven strategy of dividing your portfolio amongst different investments. Your ideal asset allocation is based on a variety of factors such as your financial goals, your risk tolerance and your time horizon.
The constant ups and downs of the markets can alter a portfolio’s asset allocation over time. Periodic rebalancing keeps your investment mix in line with your original goals. To rebalance, you simply decrease the position of the appreciated investment types and allocate the proceeds to the other asset classes. In this way you can put into practice the basic rule of investing: buy low and sell high.
To make portfolio rebalancing as simple as possible, we’ve developed Mackenzie Guided Portfolio Service (GPS), an automatic rebalancing service available at no cost to investors in Mackenzie Mutual Funds. You and your investment advisor construct the portfolio that will be enrolled in the program. With Mackenzie GPS you can relax knowing that your portfolio will be regularly monitored and realigned to your own customized asset mix. Speak to your investment advisor today.