Rebalancing equity portfolio more frequently reduces risk, but raises costs

Adopt an approach that you understand and can adhere to in the long run

In the last few days, Morgan Stanley, Goldman Sachs, UBS, Nomura and CLSA have called for booking profits in Indian equities citing rich valuations, a high probability of earnings disappointment, and pressures on margins, among other reasons. Many experts believe that rebalancing investment portfolios is the need of the hour primarily because the run-up in the stock market has altered investors’ asset allocation, making their portfolios riskier than their profile permits.  

Rishad Manekia, founder and managing director, Kairos Capital says, “Right asset allocation according to your risk appetite and time horizon is the key and you should focus on maintaining