It’s important to periodically rebalance your portfolio to ensure you maintain a mix of investments that reflects both your savings goals and your risk tolerance.

Chances are, when you first made decisions about your investment portfolio, you were asked about your risk tolerance. Perhaps you filled out a questionnaire that identified you as a conservative investor who wasn’t interested in taking on risk. Or you were seen as quite tolerant of risk and willing to look at investments that had greater return potential but higher risk profiles. Maybe you decided on a 60/40 split of equities to bonds – the classic asset allocation.

Perhaps you’ve been putting off re-examining those initial investment decisions.

However, if you’re planning on leaving or have already left your employer, it’s a perfect time to take a look. To begin with, your financial circumstances may have changed:

  • Perhaps you have a shorter or longer window in which to grow your assets. Postponing retirement would be one example of this.
  • Maybe your risk profile is no longer the same. You could now be looking for greater returns, or wanting to opt for more conservative investments as you approach retirement.
  • Or perhaps the financial markets are underperforming or surging, leading you to rethink the investment products you’ve selected to make up your portfolio.

Manage your risk

Rebalancing your portfolio is about managing risk. It’s a big-picture look at what the investments in your Choices plan are doing. It’s also a way of protecting gains that you’ve made, since no investment style or asset class outperforms year after year.

Rebalancing can help you protect yourself from rash, emotional investment decisions when investments fall in value. With more varied investments in your portfolio, you’ll be more likely to look at the big picture and less likely to sell – and lose money – on an underperforming investment.

One way to assess your financial situation is to compare how your target allocation – the investments you selected way back when – matches your current one. Is it still similar or wildly different? Are you 5% or 10% off your target allocation in major asset classes? Can you meet your financial goals as things stand?

A Sun Life Financial Services Consultant* can provide you with one-on-one advice regarding your Choices portfolio. He or she can:

  • Identify your risk profile. If it has changed, you can consider investment options that may be better suited to your risk tolerance.
  • Suggest changes to your portfolio to better reflect your risk tolerance and investment objectives.
  • Help rebalance your investments.

To contact a Sun Life Financial Services Consultant* who can assess your current investment mix, call 1-877-805-9303 Monday to Friday, 8 a.m. to 6 p.m. ET.

Footnotes