Tricia Lin asked 3 years ago
Assuming I started with 10 stocks and 10% allocation each, will there be a need to do portfolio balancing on a regular basis? Given that the market value may change for the stocks over time. If it should be done, how is it done and how often should be done? How should I also reallocate and calculate the portfolio if there is a sudden windfall (e.g. very good bonus or retrenchment package)? Thank you!
1 Answers
Victor Chng Staff answered 3 years ago
Hi Tricia,
No, you don't need to keep rebalancing the portfolio. You look at the company's allocation based on cost price, not market value. If you have new capital, it will be under cash, and your portfolio of the company will reduce the percentage. In such a scenario, you can look at which company is still undervalued and then do a top-up on them.
No, you don't need to keep rebalancing the portfolio. You look at the company's allocation based on cost price, not market value. If you have new capital, it will be under cash, and your portfolio of the company will reduce the percentage. In such a scenario, you can look at which company is still undervalued and then do a top-up on them.
Tricia Lin
replied 3 years ago Understand, thank you!
Meili Lee
replied 2 years ago Oh! I learn something new everyday. Now I have to go back and review against cost.
Victor ChngGlad that you learn something here Meili. :)
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