Rebalancing, 'Boomer Candy,' Index Fund's 50th ETF IQ The art of rebalancing is crucial in managing index fund portfolios, particularly during market downturns.
It involves periodically reviewing and adjusting asset allocation to maintain a desired level of risk or return.
In theory, this process is straightforward: selling winners and buying losers to rebalance the portfolio back to its original weights. However, the actual implementation can be more nuanced than expected.