The last 17 months have been quite the run for stocks. The S&P 500 is up over 100%1 since the pandemic low on March 23, 2020. The MSCI ACWI, which represents large-, mid-, and small-cap stocks across a number of developed and emerging markets, is up over 97%2 since that same date.
The downside of such strong performance is that it can lead your allocation to become weighted too heavily toward equities versus the target asset allocation in your financial plan. It can also create some hesitancy to do anything about it since you want to let your winners run and avoid a tax hit when you sell.
Is It Time to Rebalance?
Despite the potential for capital gains, there are considerations that we review when thinking about whether to rebalance your investment portfolio:
Modera Wealth Management focuses on each client’s long-term financial plan and corresponding asset allocation to help them reach their goals. However, market appreciation can necessitate rebalancing trades to make sure your investment allocation is still aligned with your objectives, even if there are related tax consequences.
Get in touch with your Modera team if you want to discuss. We’re always happy to help.
Modera Wealth Management, LLC (“Modera”) is an SEC-registered investment advisor with places of business in Massachusetts, New York, New Jersey, Pennsylvania, North Carolina, Georgia and Florida. Modera may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. SEC registration does not imply any level of skill or training. For information pertaining to our registration status, fees and services, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov) to obtain a copy of our disclosure statement set forth in Form ADV Part 2A. Please read the disclosure statement carefully before you invest or send money.
This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements, information and opinions expressed in this article are subject to change without notice.
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