Portfolio Rebalancing

We carefully design each portfolio to correspond to each client’s degree of risk tolerance. As the value of portfolio components change over time, the risk level of the portfolio changes as the portfolio accumulates more or less of a volatile component. If the portfolio has drifted out of balance and significantly affects our recommended allocation, the portfolio may be rebalanced back to the target asset allocation.

The majority of time we anticipate the portfolio to be invested at the recommended target allocation. However, when our investment model indicates that market conditions warrant, we may recommend reducing the equity allocation in a portfolio as much as 5% to 20%.

This is a risk reduction tactic, not a market-timing technique and is designed to serve as a defensive tool to reduce equity exposure in periods of above-average market valuations.