The start of a new year can be a good time to discuss portfolio rebalancing with your clients.
Given the volatility in both the equity and bond markets during 2010, a portfolio may have experienced shifts in asset allocation. Discussing rebalancing gives your clients an opportunity to make changes and get back on track with their investment strategy.
Rebalancing can also be an opportune time to revisit a client’s risk tolerance. Given the economic downturn, increased volatility, and slow economic recovery, your clients may have a different view on their investment strategy and may wish to make other changes to their portfolios. Other life changes may also have occurred to your clients or their family members, during the recession, such as loss of a job.
Taking the time to talk about risk tolerance, and understanding a client’s personal finance situation, can solidify your trusted relationship and keep ahead of concerns that may arise later in the year.