As markets go up and down over time, your asset allocation will deviate from the strategic plan we initially set in place. A portfolio rebalancing strategy brings your portfolio back in line with your strategic asset allocation.
A portfolio rebalancing strategy is important for managing risk, but it requires trading, and there are costs to trading. Our approach to rebalancing strikes a balance between managing the risk of a large deviation from your strategic asset allocation target and minimizing trading costs.
We set tolerance bands for each asset class.
We use a robust trading system to monitor compliance with tolerance bands on a daily basis.
To minimize costs and tax events, we will remedy strategic investment allocations that move outside the tolerance band without fully resetting the total portfolio.
When possible, we use portfolio cash flows to rebalance the portfolio back into alignment with your strategic asset allocation.
Beyond this strategic approach to portfolio rebalancing over time, we may also tactically rebalance your portfolio in periods of meaningful market dislocations. For example, when stock markets dropped meaningfully at the onset of the COVID-19 pandemic, we opportunistically increased stock allocations for our clients to take advantage of falling prices that we thought to be exaggerated.
Frequently Asked Questions
What Our Clients Say
Peace of mind and a feeling of security is what all of us wish for as each year flies by during these uncertain times. I wish I had not waited until 2019 before enlisting the help of HFS, but better late than never!
The team at HFS is approachable, accessible, professional and they can explain even the most complex financial topics in laymen terms. The HFS team practices the perfect blend of the science as well as art of financial planning. I thank them for taking me and my family on as clients!
From a grateful client and her entire family, Massachusetts
My Husband and I began to work with Heritage back in 2007. Since then, needless to say, our lives and the world have taken many turns. I am very pleased to say that Heritage has always helped us make the best possible decisions, based on whatever our needs were, at that particular time.
I trust Heritage implicitly to continue to manage my portfolio, especially during these challenging times.
Myrna, New York
As a long-time client, I have nothing but positive things to say about Heritage Financial. They have strong principles, solid investment strategies, great communication and look at the financial picture holistically - investments, savings, property, insurance, estate, education, etc. everything to help you reach your goals.
Heritage has gained my trust, they invest as if it were their own money.
In a few words - Personalized. Strategic. Detail oriented. Responsive.
Joe & Patti, Massachusetts
This testimonial has been given by a current client of Heritage Financial Services. No compensation was provided for this testimonial.