Rebalancing your investment portfolio is essential to maintaining your desired asset allocation and managing risk. Over time, your investments will grow at different rates, causing your portfolio to become unbalanced. This can leave you with more or less risk than you are comfortable with. Rebalancing involves selling some assets and buying others to bring your portfolio back in line with your target allocation. By doing so, you can ensure that you are not taking more or less risk than you intended, and you can potentially maximize your returns. Regular rebalancing also forces you to sell high and buy low, which is a key principle of successful investing.
