Research has shown that rebalancing a portfolio’s holdings makes more sense when each asset class has drifted from its target allocation by a certain percentage (i.e., threshold based) rather than on a set time basis (e.g., quarterly or semiannually). Therefore, we continuously monitor your portfolio and periodically rebalance it back to your target mix, carefully taking the volatility of each asset class and your tax situation into consideration. We are not able to predict when we are likely to rebalance because it depends on the performance of each of the asset classes. We also use deposits, withdrawals and reinvestment of dividends as opportunities for interim rebalancing to minimize the taxable gains that can arise from threshold-based rebalancing.
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