Market ups and downs are normal. But when volatility hits hard — like it has recently — many investors start worrying:
“Should I sell?”
“Should I hold?”
“Or should I just stop investing?”
How to Rebalance Your Portfolio After Recent Volatility?
The truth is, you don’t need to panic. What you really need is a portfolio rebalance.
What Does Rebalancing Mean?
Think of your portfolio like a car. Over time, one tyre loses more air than the others. If you don’t fix it, the ride becomes uneven.
In the same way, when one asset (say equities) grows faster than another (say debt), your portfolio drifts away from the balance you first set. Rebalancing simply means bringing it back on track — so your money continues working the way you planned. This is how to Rebalance Your Portfolio After Recent Volatility
Why Is It Important After Volatility?
Volatility pushes your portfolio out of shape.
- If stocks fall sharply, your equity allocation may drop.
- If stocks rise suddenly, equity may become overweight.
Either way, it’s risky. Rebalancing helps you control that risk and stick to your original comfort zone.
3 Simple Steps to Rebalance
1. Revisit Your Allocation
Check the mix you had in mind when you started — for example, 60% equity and 40% debt. Compare it with today’s actual numbers.
2. Trim or Add
- If equity has gone too high, move some gains to debt.
- If equity has fallen too low, add more to it through SIPs or lump sums.
3. Stay Disciplined
Rebalancing is not about timing the market. It’s about sticking to your plan, no matter what the news says.
How Often Should You Rebalance?
For most investors, once a year is enough. But after sharp volatility — like a market crash or a big rally — it makes sense to check sooner.
Conclusion
Volatility isn’t the enemy — losing discipline is. Rebalancing is your way of keeping control, even when markets feel out of control.
If you’re not sure where to begin, connect with an AMFI Registered Mutual Fund Distributor who can help you review and realign your investments — without guesswork or confusion.
Disclaimer: Investment in Mutual Funds are subject to market risk, please read all Scheme related documents carefully before investing.