Harvesting Balance: The Parallel Practices of Portfolio Rebalancing and Garden Maintenance 

Consider portfolio rebalancing as a garden that you’ve planted with a variety of flowers, vegetables, and herbs. When you first plant your garden, you have a specific design in mind with a certain balance between the types of plants. As time goes by, some plants may grow faster or larger than others, overshadowing the smaller plants and throwing off the balance of your garden. 

Rebalancing your portfolio is like tending to your garden. You might trim back the plants that have grown too large so that they don’t take over the space, and you might plant more of the smaller ones to restore the balance you originally intended. This ensures that no single type of plant dominates your garden, and all plants have the space and resources they need to thrive. 

In financial terms, rebalancing involves selling off some of the investments that have grown to represent a larger portion of your portfolio than you intended, and buying more of the investments that now represent a smaller portion. This helps maintain the level of risk you’re comfortable with and keeps your investment strategy on track. It’s a way to ensure that your investment “garden” remains well-tended and in line with your financial goals. 

DISCLOSURES

© 2024 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment adviser does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified.

Trademarks and copyrights of materials referenced herein are the property of their respective owners. Index returns reflect total return, assuming reinvestment of dividends and interest. The returns do not reflect the effect of taxes and/or fees that an investor would incur. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. An index is an unmanaged portfolio of specified securities and does not reflect any initial or ongoing expenses nor can it be invested in directly. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

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