The term refers to a specific point in time, generally within the month of May, when investment portfolios managed by BMAY Wealth Management undergo a strategic adjustment. This adjustment involves realigning the asset allocation to match the investor’s predetermined risk profile and investment objectives. For example, if an initial allocation targeted 60% stocks and 40% bonds, and stock market performance has shifted the allocation to 70% stocks and 30% bonds, the portfolio would be rebalanced to restore the original 60/40 balance.
This periodic recalibration is vital for maintaining a consistent level of risk and return. Market fluctuations can cause a portfolio to drift away from its intended asset mix, potentially exposing investors to unwanted volatility or hindering progress toward their financial goals. By systematically restoring the target allocation, portfolios are kept aligned with the investor’s long-term strategy, helping to manage risk and potentially improve long-term performance. Historically, such proactive management has proven beneficial in navigating market cycles and achieving desired financial outcomes.
