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8. Managing Your Portfolio > Keep Allocation in Line

Keep Allocation in Line

Keeping your asset allocation on target means adjusting how much you own of each holding as investments grow or shrink.

Experts often advise investors to stay in the market for the long haul and warn that changing in vestments leads to losing ground. However, maintaining your target asset allocation [Hack #74] requires some changes to your investment, because markets experience ups and downs that translate into gains in some areas of your portfolio and losses in others. Realigning your portfolio to its target asset allocation at the beginning of each year mends the effects of assets performing differently. If you build a portfolio [Hack #73] in your personal finance software or at some web sites, you can use software and online tools to figure out the adjustments you need.


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