Portfolio rebalancing is the process of buying and selling assets to align your portfolio with the target asset-allocation percentages you determined in your investment plan.
The four strategies for rebalancing portfolios that are mentioned in the section are periodic-based rebalancing, percent-range rebalancing, equal-probability rebalancing, and active-risk rebalancing.
It is important to pay attention to the cost basis when you sell an asset because this transaction can cause an increase or decrease in your income taxes
Portfolio management is the process of developing and maintaining your financial assets as a means of achieving your financial goals. Performance evaluation is the process of analyzing your portfolio’s return performance with the goal of identifying your key sources of return.
The two types of portfolio management styles are (1) active management and (2) passive management. Active management is more costly due to the fact that more buying and selling transactions occur.
