Money & WorkMental model

Your portfolio changes its risk on its own, without you doing anything.

Say you chose 60% stocks and 40% bonds. Stocks rise 25% over a year while bonds stay flat: you now hold 65% stocks without having done a thing. Your risk has drifted. Rebalancing means periodically (say, yearly) returning to the target split. The rule mechanically forces you to sell winners and top up laggards, with no forecast or gut feeling.

Useful: A plan you never reset stops being your plan after a few years.

Source: en.wikipedia.org

Investieren Mental model Risiko

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