Portfolio Rebalancing
After the recent drops in the stock market I thought it might be a good time to take a look at my portfolio to see what has done well and what has not. I also went ahead and rebalanced everything to my original allocations.
The biggest thing I noticed about my portfolio is that my company stock has reached an amazing 38% of the portfolio. My company has done fairly well relative to the rest of the market, which is part of the reason the percentage is so high. The other reason is that my employer match comes in the form of company stock.
This is important for anyone to watch. If you receive your company match as company stock instead of cash you should rebalance your portfolio often to minimize the risk of loss in that stock. What percentage of your portfolio you keep as company stock is up to you, but I prefer to keep a low percentage in my own. If my company does well then I will likely be compensated well at bonus time. If my company does poorly, however, I could loose both a large portion of my portfolio and my job depending on what happens. So for me it’s a matter of risk control to keep the portfolio percentage of my own company stock low.
Here’s a link to my retirement post regarding rebalancing. Have you looked at your portfolio recently? Do you know right now, roughly, how each of the parts of your portfolio have been doing? If not it’s time you take a look.
