Upgrade… (part 3 of 3)

Upgrade
The third point of the upgrade article is more investing specific. 

Rebalance. 

Imagine you had 60% in stocks and 40% in bonds. Your stocks went down 40% and your bonds went down 15%. A $100,000 portfolio now is worth $70,000, but even more out of wack is that now you are almost 50% stocks and 50% bonds. That's not what you wanted in the beginning, so sell/transfer/exchange some of your bond portfolio into your stocks to make it 60/40 again. You'll be buying stocks and lows and selling an asset class that did better. Buy low, sell high. That's what we're always trying to do. 

I rebalance most portfolio's annually, so you should take a look at your funds/401k/403b and do the same. This market downturn will turn around eventually, but you don't just have to sit on your hands and do nothing. 
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2 comments

  1. Dude! Just wanted to make sure you knew that I caught your comment on mine. Hope you guys are doing good, it’s been a while! Oh yeah, and my wife made me check your wife’s blog for her latest post. My comment was “so that’s those look like.” Latez.

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