How to rebalance your portfolio? A guide

[@pattufreefincal]

Watch my corporate presentation: Commonsense approach to managing money here: freefincal.com/watch-my-talks/

[@nikolaimaximus7393]

I dont mean to be so off topic but does anyone know a tool to log back into an instagram account? I stupidly lost my password. I would love any tips you can offer me.

[@SHIVANKARTIWARI]

My age is 27. Started investing since last 3 years only. I had 5-6 funds since day 1. But recently, brought em down to 3. Out of those two are UTI nifty and nifty next 50 third one is Kotak select focus. Rest I have 70 % in epf and PPF. Trying to achieve more exposure in equity.

[@pattufreefincal]

Thanks for sharing

[@sivakumarayyadurai9436]

My age is 49. Started investing from Dec 2014. First did 40% in FD rest 60% in Equity via SIP. As per my plan till today I didn't rebalance since I started investing because due to the plan I made up just keep investing in MF till my 50th birthday and I will be rebalancing as 50:50 on my 50th birthday in Dec 2020.

[@PukeSkinwalker]

The idea is to use a portfolio optimization strategy to rebalance. So that the risk reward is significant. Every single rebalance (quarterly on triple witching) should be optimized and the idea is that you can win.

[@santunubhaduri5353]

I did some rebalancing.I sold around 75% of my units which were around 2years old.Because I had so many funds(as previously I bought unknowingly).I had around 8% annualised returns.I reduced the fund nos.to 2 and invested some amount.Also I put some amount in fd.The rebalancing process was haphazard.Still I am learning.😊

[@MayurGijam]

This is my second year of investing. I do follow 50/30/20 rule, I have increased second year investment value by 10% and I have rebalanced equity (mf+stock) to 70%, gold to 10%, debt to 10% and ppf to 10% :)

[@saipraveen7018]

I am learning about these concepts from you Pattu Ji...Will rebalance soon. Thanks for the valuable content sir

[@roy2k03]

Dear Mr. Pattu, Thank you so much for this video. I am 42 now and have a heavy debt portfolio. I am going to retire at age 58. I started equity investing when I became 40. Now my equity is 24% and debt is 76%. I can not withdraw my debt portion as 50% in EPF and VPF, 16% in PPF and 10% in Fixed deposit (12 months expense as emergency fund). I now stopped the VPF and diverted that amount to Nifty 50 Index fund. In equity portion I have 2 funds only Nifty 50 Index and nifty next 50 Index in a ration of 70:30. I will not invest more on debt except my mandatory contribution of 12% basic. My desired allocation of Equity and debt is 65:35. But it seems hard to achieve till my retirement. Primafacie equity and debt ration will be 57:43 at age 58 unless there is huge gain in equity portion. Hence I am unable to rebalance till I become 60. Anyway my focus is now to invest more in Equity and divert all income towards equity.

[@Vivek788]

One basic question which arose while watching this old video: isnt this asset allocation per-goal? I have this large EPF/VPF/NPS corpus which I can't use any goals other than retirement. So I am thinking of splitting a large chunk of equity into the several goals and create new fixed income funds for non-retirement goals. This calculation has been difficult as I had run some return projections to find the right split between goals. I realise that expecting certain returns is flawed. But I find no easy way to clean up separate funds of different types, horizons into a neat set of goals after close to 6 yrs of investment. I guess this is a learning journey and i am glad I have access to a voice like yours which has strong conviction on how to approach these problems.

[@vivekraghuram2459]

I have two equity mutual funds and one debt fund. I started investing two years ago and rebalanced at the start of this year to 60:40. Given the present bull market (2024) it looks like I will have to rebalance again as the equity returns are stellar right now.

[@makarandvaishnav4536]

Age 35 & started late in equity Present allocation 90 debt : 10 equity Will try to invest more in equity to increase for rebalancing

[@raghavendrasankar8565]

Much awaited topic. Thanks. For example, one buys equity fund units in nav between 20 to 35 in sip. now the equity market is high, to rebalance he sells some equity fund units on fifo basis nav between 20-25 is sold. After few years market crashes but not heavily because heavy market crash occur rarely every 7 to10 years. His equity fund nav is 28. Now he cannot buy the units in the nav he bought earlier. what he should do. Please clarify sir. Thanks again.

[@nagamanickam5702]

I didn't follow rebalance and regret for corona crash and rally after that.. Now I'm watching this

[@Vivek-rg1we]

I have invested 100% on equity and now 5% in fixed income, my plan was to accumulate for few years and then rebalance in fixed and equity...it's a challenge but need to rebalance, although I dnt believe one should be doing rebalancing every year , I believe it's necessary and logical implementation of goal based investment..

[@arunbe4728]

In my 10 year investment journey, i never rebalanced. But i stop investing equity three four times. It rebalanced itself

[@chandrakumarmagalingam6732]

Great content. Learned new things today. Rebalance ur asset allocations from good performance assets to weak asset allocation. I am 43, started SIP from 3 years back advised by Fundsindia based on my goals. What I realized now is I should increase my Fixed assets percentage bcoz I have less than 10% FD and MF equities rest 90% Now I understand should rebalance to 60:40 eq:FD When my MF market is high.

[@DobaakoorNo1]

"why should there always be a best way!" - Pattu

[@balakasi_]

Thanks for the video sir. I got introduced to the concept of rebalancing only after i started following you. So firstly thanks for that. I am 35 years old and i have 54% in debt and 46% in equity. I was doing a vpf contribution till last year and have now stopped it to increase my equity exposure. Like you said in the video, it takes a long time i think to reach the 60:40 allocation and i am kind of not comfortable to break my ppf to invest more in equity, so i have been increasing my monthly contribution to equity from the past couple of months. Thanks for the deck. I haven't watched it yet. Just bookmarked so that i don't miss the link.

[@navreetjosan158]

Great video! I’m 7.7% equity and rest in fixed at 35 yrs 😑 Thank you for the tips. Can’t wait to implement

[@dennisthomas8755]

Best video I have watched on portfolio rebalancing, thank you sir!

[@diycarcleanindia4155]

Excellent video with practical suggestions. 1. My EQ:DT varies between 70:30 to 80:20 with planned progressive reduction of equity. 2. Agree there could be many approaches to rebalancing, the important thing is to DO it rather than overanalyzing best method. 3. In addition to rebalancing existing investment, important to also rebalance NEW/SIP investment in same ratio ( something I learnt from freefincal) 4. I have a question on retirement portfolio. Most of us got high debt component thanks to mandatory EPF deduction. Given we will not withdraw from EPF and rebalance into debt, how do we maintain a high equity asset allocation?

[@pattufreefincal]

4: Big problem. Only solution is to aggressively increase equity allocation

[@diycarcleanindia4155]

@@pattufreefincal Thank you sir. I also hear EPF itself contains some portion of equity allocation (10% or so). Should we factor this in the calculation.

[@pattufreefincal]

@@diycarcleanindia4155 no it is too small

[@dittodavis]

I have not rebalance my portfolio yet !! I am planning to have a better portfolio management !!

[@Digambertawde]

awesome way to explain, thank you very much for the video. I have not yet rebalance my portfolio, will do it in next year.

[@sathyamurthysrinivasan2216]

I am 64, retired Govt. servant. Started equity when i was 52. Now i want to sell off existing MFs and re balance while reinvesting. I want to have 60-40 equity-debt ratio though i can go for 70-30. Goal is to raise a corpus for a noble cause. I think it is better to invest more in equity right now and reduce ti to 60-40 after a year when we sense the slightest fall. Will u please clarify?

[@Indiasoccer]

Sir you have been a God kind of help to me. You have no idea!

[@pattufreefincal]

Thank you

[@prakashchandraverma4444]

Thank you so much Sir. This is very helpful. Currently I am also in a Fixed Income boat (EPF+PPF has been started early and still more weight that equity). I was considering to take a liquid fund only for re balancing, but now I got clarity that still need to wait unless both equity and debt becomes at least 50:50.

[@rageshgr]

Was about to ask this question then stumbled upon this video. Started equity 2 years ago. At age 33. In last 2 years aggressively pumped money into equity. Now it's 33:67 equity:debt. Still. It will be a long time before I reach 60:40 but on the way

[@dr.anandaggarwal6791]

Two questions 1. Is rebalancing essential after one year of investment in equity mutual funds for ten year goal? 2. How to rebalance if one is uing online platform such as GROWW app for mutual fund investments which does not give option for partial withdrawl!

[@jhunjhun1]

Thank you very much Pattu. I heard about the rebalancing in the Podcast. But there were not much details about it. Here I got it exactly. But one thing is worring me lot that stock selling is understandable But what if I sell my MF units? As I used to think don't sell MF units it'll affect your Gains. Please take a look here. Thank you once again. ❤😊🙏🏻

[@pattufreefincal]

Selling units or stocks is the same. We need to do it to reduce risk. Gains are in hindsight. Risk is in the journey

[@Indiabhanu]

Sir this is the best analysis and understanding of rebalancing I got to know. Thanks. Sir I have a query. How to rebalance a SIP of portfolios? Say I have in vested in 74% Equity( 20% Large, 27% Mid, 27% Small) 26% Debt after 1 year? Kindly advice.

[@harishtadwalkar7177]

Hi , Can you please make video on what is portfolio? and what are considered as the components of portfolio ?

[@Aman-jl3sy]

I am 26. My first investment was in PPF as it was safe and easy to understand. Researched a lot about MF from youtube and blog. Opened demat account on zerodha and made with a kotak multicap fund(planing to buy a mid/small cap too) with a small SIP amount. Trying to park some good amt of money in liquid so that SIP can continue when I go for an MBA as I dont want to miss out the power of compounding. I have some queries: 1) Any recommendation on debt MF which would help in rebalancing. Is it good to buy debt MF to rebalance or use FD for it? 2.1) If I have DECIDED to redeem all of the units for a MF which is not performing well consistently, will it wise to redeem all unit at once. I am worried about the tax implication(If I have gains in lakhs of rupees) after redemption and also the profit loss due MF not performing well. 2.2) The money that i took out from the MF in 2.1, should i invest that in Liquid MF and then do the SIP in a new MF my self. I would park the money in liquid MF and every month I would redeem some units to do the SIP in other equity MF. I also need a comparison of this process with STP. Thank you for your help

[@ashishtalyan]

No rebalance sir from my side like as you said,no shifting to debt 😐 Valuable video 👍

[@par-excellence]

Nicely explained concept of re-balancing. I am 37 and haven't ever bought any fixed income securities. My entire allocation is to equity. How do I go about balancing. How important is it to re balance and is it even possible to do it when the equity portfolio has no gains given the current situation. Thanks

[@bijendergoyat99]

Sir, your information is pretty good. But videos have some sound problems(perhaps echo problem in room). Plz improve the quality of sound.

[@sachinkulkarni6956]

Hi Pattu sir, how about having a balanced hybrid fund and not worry about rebalancing?

[@rameshparekh581]

What you said in the first part of the video is best. --------------------------------------------------------------------------------- My thoughts : It doesn't matter what the person's age is. It's better to manage equity exposure based on market overvaluation, like you mentioned at the start (and not do it based on deadline or age). Even if you are 25, and if the market becomes 4X in 2 years, it' makes sense to shave off 3/4 of the gains and park it in debt before there is a retracement.

[@pattufreefincal]

I don't think I said any of that!

[@rameshparekh581]

@@pattufreefincal My first line needs to be looked at separately from the rest of the comment. I've added the bifurcation now.

[@shoannessecidadeafonso3124]

good information... i had exposure in two mutual fund & this time when nifty reached 12000 points...the xirr=30% & 18% respectively in 1.5yrs... so i redeemed my units (LTCG)and switched to debt fund...and will reenter when market are turbulent. was it a smart move?? although i have other equity funds exposure from other AMC

[@maheshdeshmukh1888]

1 hint for new video.. I feel most people are dealing with stocks and MF. but very few showing them in ITR as most people are filing ITR1. Can you throw some light on that. Pls...

[@247794252]

Dear Pattu, I’m bit confused. I do invest 100% in equity last 8 years and doing well How rebalance works for me!

[@Ayaan2000]

Age : 35, 1.nifty 50 index 7.27 lakh 2. Ppfas flexi 6.77 lakh 3. Midcap 150 index 6.44 lakh 4. Quant small cap 3.79 lakh 5. Canara small cap 3.31 lakh 6. Nasdaq 100 2.94 lakh 7. Mirea midcap 1.02 lakh total 31.50 lakh rest approx 2 cr in fds… main goal is kid education which is 15 yr away.. i hv own house…main source of income is fd interest how to go abt same

[@snsramkumar]

I am fit in the 2nd category. In 35+ started 1 yr back. Having eq vs dt as 23:77. Should i refrain from rebalancing till my desired allocation reaches(60:40) ? 77 Debt is in PPF and EPF . Is it gud to have a debt fund (liquid or ust) for rebalancing?

[@maheshkatari4603]

Thank you sir...for life changing ideas..

[@therichbudget]

Great insights sir, as always. Thank you.

[@soumenghosal522]

Thanks sir. I shall be happy if you explain whether expense ratio will be charged each time I switch a fund. Although, fund remains within the same fund house i.e. from one scheme to other say equity to debt or vice versa.

[@pavanbv7395]

How many people have the knowledge n GUTS to push money from fixed income assets into equity when the market crashes???????

[@amitkanjilal1158]

Sir, I have Rs. 12L in my NPS (50% Equity & 50% fixed income) account and have Rs. 5L in Fixed income. I have started investing from last 6 months and accumulated Rs. 1L in equity. I am 28 years old. Right now I have stooped to invest in any fixed income except the mandatory NPS. I am planning to wait until the overall asset allocation reaches to 70:30. Is it good strategy? Please enlighten

[@kevinmanis]

Got this video sir, thanks

[@swanandarjunwadkar6247]

why do u think about hybrid funds - balanced fund(Aggressive/Conservative), Multi Asse, Dynamic asset allocation needs rebalancing? They already have debt component. I do agree if value in a fund is above once asset allocation then re balancing is required, but how do we do that? so small video on rebalancing in case of all hybrid funds will be helpful.

[@pattufreefincal]

Please see todays video

[@sudharsanans8989]

Sir, I'm 30 now and haven't saved anything so far. I'm starting to save from this month. I can do around 20,000 rupees per month. I'm new to stock market and mutual funds. Had learnt to some extent now. How many mutual funds can i invest in? Like one with high risk, one with low risk low benefit, one long term, one short term. What percentage in each risk category. Can in invest in shares directly in addition to equity mutual funds. Please give your inputs, sir. Have you made a video on this, sir.

[@chaudhariswapnil6642]

Invested since Dec-2016, but never rebalanced...😢

[@Charle459]

Sir plz make a video on commission and tax at the time of redimtion af index fund

[@harimenon3371]

Nicely explained...

[@vikramchauhan1831]

Sir onse should calculate nifty EPS and the year you get 50% return take out money that year

[@nikneo7363]

Could you please add HDFC bank to purchase your model portfolio tracker or at least increase limit of the UPI. It says maximum allowed is 2500 INR and the course costs over 4k. Thank you or maybe I am doing something wrong. Pls suggest

[@chandranem]

What's Ur take on ICICI Pru asset allocator fund...which does automatic rebalancing(by fund manager).... It's a fund of funds,and treated as debt for taxation... Thx Chandra

[@maheshdeshmukh1888]

Hi Pattu, Very Very Nice post. 1 Irrelevant question. Which ITR form we should use for filing returns, if we are dealing with MF and stocks...

[@shrawankjha]

ITR 2

[@TheBanterCity]

Appreciate it Pattu sir.

[@manujarora9788]

How to do portfolio balancing with gilt funds and equity funds ?

[@justcurious9169]

Sir through some light on capital gain tax too considering rebalancing !!

[@pattufreefincal]

Pay the tax! Risk management is more important!

[@diycarcleanindia4155]

@@pattufreefincal Also the govt allows upto 1 lakh of CG per year. The equity amount to be sold will be far higher to result in an 1 lakh CG (also the gains will be computed after the 2018 budget date of 31.01.2018.

[@pattufreefincal]

@@diycarcleanindia4155 Yes but that does not matter here.

[@sheirshsaxena4228]

What i dont like about rebalancing is letting go of the winners and investing into losers. That concept just doesn't fit with me, Even in stock market alone, according to Peter lynch himself , people do the mistake of letting go of the winners in their portfolio and increasing/averaging the losers in their portfolio. So it kind of doesn't sit well with me, and I find Peter lynch's advice on it very logical and a common sense.

[@ranganath1990]

Sir, if we have balance fund, do we need to rebalance ?

[@asht9193]

Any guidance how to decide right asset allocation which is first step

[@pattufreefincal]

See past articles or videos

[@drnitinsharma2614]

How gold etf and sovereign gold bonds be treated in rebalancing ???

[@RavindraJuyal]

Useful info. Thank you!

[@sravan1004]

Sir, can you throw some light lumpsum investements as per robo template for child education, as such I'm currently capable of investing enough corpus, it should be of same 60 percent and 40 percent. But incase of debt I have only option for ppf (NRE) and ppf has its own limitations. Can I have my debt portion in ppf and Gilt funds..? If possible make a video on future goals with lumpsum investment in current position on how to spilt and rebalance..?

[@pattufreefincal]

Just invest the lump sum as per desired allocation

[@yeshassiddims993]

Hello Sir, what percentage of appreciation will you classify as stellar returns? one of my large cap fund is at 11% appreciation on an investment of 1 lac. Do you think this a good time to rebalance? Thank you!

[@pattufreefincal]

do not use returns to rebalance.

[@parichayisongo6798]

Does NPS fall into fixed income category ? I'm 25+ , govt employee . Should I make an emergency fund and go all out for equity ? ( My service has been about two years. I haven't created ppf account till now)

[@rmns987]

good question. Hope he answers your qyuery

[@Dpak1980]

What about the tax implications when you pull money from one asset class. You will lose money thete...

[@pattufreefincal]

What is more important losing money in the market or paying a little tax?!

[@sudharsanans8989]

Sir, in the initial years of our investment in equity should I wait even if the stock market crashes or should I rebalance?

[@pattufreefincal]

You can rebalance if your equity allocation deviates by + or - 5%

[@sudharsanans8989]

Thank you, sir 🙏

[@nivedhidhaganesh9130]

Currently my equity mutual fund portfolio is down by 5% , do I need to rebalance by shifting it from fixed income?

[@TheBanterCity]

Don't. Rebalance only when equity is up by 10% or more.

[@abhishekpardeshi1545]

Well said sir

[@gopalkrish8395]

Dear Pattu Sir, Thank you for this valuable video. As always very informative and to the point. Do we consider non movable assets like House, Gold, Land etc also as part of the portfolio? If yes, presumably they should be allocated to the debt portion and then re-balance the portfolio? Thanks Gopal

[@pattufreefincal]

You should include own house (where you live in) as an asset. Other property cannot be rebalanced so has to left out.

[@hsiraj22]

Not yet.

[@govindshikerkar]

Salaried, 32, 60:40 D:E. Desired allocation 40:60. But Re balancing done over the period of 12 months not via lumpsum. I don't have hybrid MF. How should a hybrid mf be treated while re balancing ; Equity or Debt ?

[@pattufreefincal]

Good Q! Equity

[@govindshikerkar]

@@pattufreefincal If there is sharp market swing that isnt at the same period of my Rebalancing Frequency, do you recommend mid cycle rebalancing ?

[@RDd188]

Not done yet

[@michaelezekiel3506]

Never re-balanced.

[@nithinz]

Sir, I am unable to download the Robo advisory template for free.

[@pattufreefincal]

You can see the reasons also mentioned in the same page

[@pattufreefincal]

@A B No

[@ashutoshmishra9749]

Can it be downloaded and run in mobile..??

[@pattufreefincal]

no

[@narayanbhat4173]

Which are the fixed income schemes you are referring? Bank FDs?

[@pattufreefincal]

Yes and debt funds too

[@hsiraj22]

Please classify list of fixed income instrument available nowadays

[@nirmalsomkure4664]

Sir, my age is 38. All saving are in PF only. Just started investing in mf a year ago. Are you suggesting that I should stop contributing to PF via vpf and pump all money into mf till the asset allocation reach 60:40 ? Pl advise. It will be very helpful for me and others also.

[@mukeshkannan7837]

You can't stop PF & never do that. Instead pump 2-3 times more of PF contribution into MF. Over a period of time, it will come to required ratio. I did it in my past, I ensured that there was no EMI or any loans. Started pumping into HDFC balanced & Bluechip funds. Now it is almost 60 (EQ) : 40(DT) after 7+ years. My two cents. Hope it helps.

[@badriias]

No. Never.