When should someone start to rebalance their investment accounts to more conservative holdings? 10 years out? 5 years?
I imagine the obvious answer is that it depends on each person's unique circumstances, but is there a general rule of thumb to follow?
Reallocating investments for retirement
byu/Kredit-Carma inpersonalfinance
Posted by Kredit-Carma
1 Comment
I would suggest checking out the holdings of various target date funds to see how they handle it.
It all depends on your risk tolerance. It also what you consider a more conservative investment. If savings accounts rates are at nearly 4%, cash works be a great “risk-free” rate of return, but then you will have inflation to worry about. You could look at value dividends stocks and ETFs, corporate bonds, or Treasury bonds.
Rebalancing should be an ongoing process that you do at least yearly, or multiple times a year if you’re looking to optimize your risk.