At Vinovest, active rebalancing is guided by clear criteria designed to align your portfolio with its target time horizon and optimal diversification mix. This process ensures your investments remain balanced and poised for long-term growth.
Here’s how we determine when to rebalance:
Adjusting Overweight Assets: If an asset exceeds its target allocation, we may sell some of it and use the proceeds to invest in underweight assets. The allowable deviation for each asset depends on its target weight—larger weights have slightly more flexibility.
Reinvesting in Underweight Assets: If an asset’s allocation falls below its target, we may purchase more using cash from prior sales or account deposits.
For example, your portfolio may be set for a 30% exposure to Burgundy. Over time, this could rise to 50% due to market shifts, increasing your portfolio’s risk. In this case, we would reduce exposure to Burgundy and reinvest in other regions to restore balance and mitigate risk.
This thoughtful and dynamic process ensures your portfolio remains aligned with your investment goals while adapting to market changes.