I had always heard that investors should rebalance their portfolios at least once a year, maybe twice a year and at the same time every year. But I never heard that everyone should rebalance at the same time of year, yet that’s exactly the basis of a recent Wall Street Journal article:

Given the remarkable run in share prices, prudent, long-term investors should consider rebalancing their holdings to lock in gains and return their portfolios to a more diverse position. Advisers usually tell investors they should do this at the start of each year.

I’ve shied away from the beginning of the year because that’s when many people’s bonuses come in, and some of those find their way into the market. By rebalancing before the new year, I’ve got my asset allocation in order before this new money comes in.

The article points out that after the recent market rebound from it’s March low makes it especially important to rebalance. After all, if the market should take another tumble toward those lows, your asset allocation could be so out of whack that it could magnify those losses even more.

“The exception to doing it annually or on a calendar basis is when you see significant shifts in asset values,” says David Fleisher, co-founder and president of Firstrust Financial Resources in Philadelphia. “A 50% rise in the stock market, as we’ve seen, would qualify.”

I couldn’t agree more.

I actually have my portfolio set to rebalance automatically every October anyway so I’m set for this go around, but this article got me wondering when people usually

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