Saturday, May 26 , 2018, 1:31 pm | Fair 67º



Mark Delgadillo: Is Your Financial Life Balanced?

Re-evaluating your portfolio can help ensure your investments are in line with your goals

Balance is vital in every aspect of life. Whether we’re considering diet, work and home life or friends and family, balance is key to success.

Mark Delgadillo
Mark Delgadillo

Your investments depend on a healthy balance as well. Being too heavily invested in one type of asset can weaken your entire portfolio. Rebalancing can help keep your asset mix in sync with your investment strategy.*

Risk Considerations

When you initially invested, you chose a variety of asset types for your portfolio that fit your time horizon, risk tolerance and investing strategy. But market fluctuations can alter the value of your investments and the percentages allocated to each asset class. As time goes by, you may be taking on more or less risk than you’re comfortable with.

Rebalancing your portfolio can restore your original asset allocation. Or, if your feelings about risk have changed, rebalancing can bring your portfolio in line with your current risk tolerance level.

Market Volatility

Although it may be tempting to disregard your investments in a declining market, rebalancing may be even more critical at that point. Make it a priority to evaluate investment performance annually, semiannually or even quarterly so that if your goals, asset allocation or risk tolerance have changed, you’ll be able to rebalance your investments to match your objectives.

Portfolio Tune-Up

When you’re ready to rebalance investments, there are a few options for you to consider.

The first option is to allot a larger percentage of your new investment dollars to the asset class that’s falling behind, and therefore underrepresented in your portfolio. As more money is directed into it, the underperforming asset class will gradually be restored to the percentage of your portfolio that you originally intended.

If you prefer to return your portfolio to its original mix, you may prefer a second option. You can quickly rebalance by selling investments in the asset classes that have lost ground. Although you may be reluctant to sell investments that are thriving, especially to buy investments that aren’t, put rebalancing in perspective. Remember, sticking with your original strategy may be a smart idea. Talk with your financial adviser and determine what option is best for you and your future.

* Rebalancing a portfolio doesn’t ensure a profit or protect against loss in a declining market and may create a taxable event if done outside tax-favored retirement account. Asset allocation won’t guarantee a profit or ensure against a loss but may help reduce volatility in your portfolio. Diversification cannot eliminate the risk of investment losses.

— Mark Delgadillo is a financial advisor for Crowell, Weedon & Co., 111 W. Micheltorena St., Suite 200, in Santa Barbara. He can be reached at 805.618.3160, or click here for more information.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.

Become a Supporter

Enter your email
Select your membership level

Payment Information

You are purchasing:

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >

Meet Your Realtor Sponsored by Village Properties

Photo of John Sener
John Sener
"I am known for tenacity, diligence, honesty, and sound decision making with the ultimate goal of closing every transaction to the satisfaction of all involved parties."

Full Profile >