In investment, “rebalancing” is basically defined as “the process of realigning the weightings of a portfolio of assets,” with the goal of minimizing risk and maximizing returns. For this reason, there is a need for rebalancing, either to recapture the stock portfolio’s original risk-and-return characteristics or improve its risk-and-profitability profile. According to studies, there is “no known optimal frequency or threshold when it should be done.”In theory, selecting a rebalancing strategy is dependent on one’s “willingness to assume risk against expected returns.” This means that rebalancing is very much an individual concern. Table 1 below is the record of transactions of the three active players of the virtual stock trading challenge in Week 13. The rebalancing efforts changed the profitability profiles of their respective investment portfolios: Pixiu was to retake the number one position with her gain for the week of 4.76 percent, which established a new record performance of 104.79 percent return-on-investment (ROI).

Source: Manila Times June 04, 2018 17:08 UTC