Time to Rebalance?

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In your Premium newsletter, you discuss “Going Defensive”. Like most moves that require precision skills, I am a failure. So, like you recommend, I use defensive stocks in my portfolio to protect it so I can sleep. However, after the big run we have had in a few segments, is it time to rebalance the portfolio, selling some of the winners, and adding to some of the “defensive” stocks, to get back to the balance you thought was right two years ago? If so, which of the Bull stocks should we look to trim, and which “Defensive” stocks is this a good time to consider?

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Asked on September 14, 2025 10:12 am
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In terms of rebalancing, this is something that is completely up to the individual. Depending on what your portfolio goals are and target allocations, ultimately the decision to rebalance is a decision you have to make based on your overall risk tolerance.

If you thought your allocations were "right" two years ago, I'd imagine you are sitting at a portfolio allocation you are not currently comfortable with but are dealing with due to the runup in price. If this is the case, it does make sense if you do want to rebalance back toward your optimal allocations because ultimately those optimal allocations are structured around your return goals, risk tolerance, time horizon, etc.

I wish I could answer these questions a bit more definitively, but I just can't. And the primary reason for this is I really don't know anyone's investment goals here. I know some people who've had positions run up to 10,20,30% of their entire portfolio, and they're comfortable with that. I know some that have trimmed them down and allocated elsewhere because it fits their overall strategy.

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Posted by Dan Kent
Answered on September 15, 2025 3:09 pm
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