Time for a Portfolio Review? Yes, Right Now

Updated August 2026

Now Is the Time to Revisit Your Investment Strategy

The rebound tells you something beyond the raw numbers. From a low near 6500 in early 2009, the Dow pushed past 13000 by mid-2013, more than doubling in under four years. Anyone who stuck it out through the crisis has earned a moment to stop and take stock.

Here’s the complication, though. A lot of us are still carrying the emotional weight of those 2008 losses. Getting back to “even” feels like more than a number on a statement. Once markets start climbing again, the temptation is to just ride it, hoping for more, often at the cost of any real risk discipline.

Right now, with account balances steady and plenty of investors back above where they started, you’ve got something rare: a clear head. You’re not staring at a crash. You’re not chasing losses. Use that calm while it lasts.

Say you put $10,000 into a balanced fund, 60% stocks and 40% bonds, back in March 2009 and just held it. By June 2013 that would’ve grown to roughly $17,300. But without any rebalancing along the way, the stock portion could have crept up past 70% of the total, quietly adding volatility you never signed up for. Shift 10%, about $1,300, from stocks into bonds, and you lock in some of that gain while dialing back the risk. No forecasting required.

Rebalancing Is a Discipline, Not a Chore

Rebalancing has nothing to do with guessing where the market goes next. It’s about resetting your risk profile so it still matches your actual goals. When markets rally, the winners, tech stocks, equities generally, grow faster than everything else and start crowding out the rest of your portfolio, often past your comfort zone.

Picture starting 2009 at 60/40 stocks to bonds. A strong rally could easily push that to 75/25. That’s a real jump in volatility exposure. And corrections happen regularly. One could erase years of gains fast.

The Federal Reserve’s 2013 Flow of Funds report put average household equity exposure at 62% by the end of 2012, a big shift from pre-crisis norms. For most people, that wasn’t a deliberate choice. It just happened because they stayed invested.

Staying invested is fine. Staying unbalanced isn’t the same thing. Rebalancing keeps your risk level where you actually want it, whether that means trimming stocks for bonds or moving into calmer sectors.

Morningstar found that investors who rebalanced annually earned about 1.8% more per year than those who didn’t, even after transaction costs. Over a couple of decades, that gap adds up to real money.

Take a 50-year-old earning $75,000 a year, credit score around 620, who needs about $8,000 for home repairs. Tapping the investment account might feel risky. But if that portfolio has grown to $25,000 since 2009 and sits mostly in equities, moving $2,000 into a money market fund now buys liquidity and stability without derailing long-term growth. The FDIC insures deposits up to $250,000 per depositor, so that cash stays safe.

When Markets Swing, So Do Emotions

Market swings trigger emotional responses, something behavioral finance research from the Federal Reserve has documented repeatedly. People tend to sell after losses and cling to winners even when they’ve gotten overvalued. Loss aversion drives a lot of this: the sting of losing money hits about twice as hard as the pleasure of gaining it. Most people won’t sell until they’ve hit break-even, which is exactly how bad decisions get made.

Look at the S&P 500: it bottomed at 676 in March 2009 and reached around 1640 by June 2013, a 141% gain in four years. Yet plenty of investors still felt behind, mentally anchored to prices from before the crash.

So check your portfolio now, not out of fear the market’s about to crash, but because things are calm. Calm is exactly when clear thinking is possible.

Locking In Gains Without Panic

If your portfolio sits above break-even, you’ve got company. Investment News reported that over 68% of individual investors had recovered to pre-crisis portfolio levels by mid-2013. The danger now is waiting too long and selling at the top, or jumping out too early and missing further gains.

Rebalancing solves that problem. Sell a slice of your winners, maybe 10-20%, and move that money into something steadier, bonds or a money market fund. The FDIC treats savings accounts and money market funds as insured up to $250,000 per depositor, per institution, which is part of why they’re considered safe parking spots.

Chase and SoFi both offer free portfolio reviews and rebalancing tools if you’d rather not go it alone. You don’t need a finance degree for this. You just need to act before the emotional pull of the market takes over again.

What Happens if You Wait Too Long

Let’s be honest: most people don’t touch their portfolio until year-end or after some major life event forces the issue. That’s not a strategy. That’s a habit, and habits don’t shield you from risk.

The Consumer Financial Protection Bureau warns that investors who put off portfolio reviews tend to end up with more risk exposure and worse outcomes. The reason’s simple enough: when markets climb, people relax. They stop checking in, assume everything’s fine, and then get blindsided when the correction finally arrives.

Plenty of investors felt “fine” in 2007, right before losing half their portfolios or more in 2008.

You’re not in that spot now. You’re not down 50%. You’re not panicking. That’s an advantage worth using while you have it.

How to Conduct a Real Portfolio Review

A real review goes past glancing at your account balance. It means asking harder questions:

– What was my original investment goal?
– Does my current allocation still match that goal?
– Am I overexposed to one sector, like tech or energy?
– Are my holdings too concentrated in a few stocks?
– Do I have enough diversification across asset classes?

If you’re not sure where you stand, Experian’s credit and financial health resources or a quick FICO check can round out the picture. Then ask the real question: would I be okay with the kind of loss a downturn could bring? If the answer’s no, it’s time to rebalance, even while you’re making money.

Here’s a simple framework:

| Asset Class | Original Allocation | Current Allocation | Action |
|—|—|—|—|
| Equities | 60% | 72% | Rebalance down |
| Bonds | 30% | 20% | Rebalance up |
| Cash/Money Market | 10% | 8% | Hold or increase slightly |

That’s a fairly typical imbalance. If your numbers look similar, you’re carrying more risk than you meant to, and that’s an emotional drift, not a strategic choice.

Rebalancing Means Realigning, Not Selling Everything

A lot of people assume rebalancing means dumping everything and starting fresh. It doesn’t. It’s a periodic reset that keeps you on course without abandoning the plan you built in the first place.

Say your target is 60% stocks, 40% bonds, but stocks have crept up to 70%. Sell 10% of the stock position, buy bonds with it. No panic, no full liquidation. You’re not predicting anything. You’re just staying disciplined.

The Federal Reserve’s Z.1 report shows that investors who rebalanced regularly saw higher long-term returns paired with lower volatility. That’s the actual payoff, and it comes from consistency, not from timing anything perfectly.

One important caveat: rebalancing doesn’t suit everyone, particularly investors close to retirement who need steady, predictable income. If capital preservation over the next two years is the real goal, shifting money out of equities that are still performing well might be premature. Rebalancing works best when you’re optimizing for long-term growth and risk control, not when you need stable cash flow right now.

A Real-World Rebalancing Calculation

Let’s run the actual numbers using 2013 data.

Say you started 2009 with $50,000 split evenly, $30,000 in equities, $20,000 in bonds.

By June 2013, equities had grown roughly 141% based on S&P 500 performance, and bonds had returned about 3.5% annually:

– Equity value: $30,000 × (1 + 1.41) = $72,300
– Bond value: $20,000 × (1.035)^4 ≈ $22,950
– Total portfolio: $95,250

Your new allocation looks like this:
– Stocks: $72,300 / $95,250 = 76%
– Bonds: $22,950 / $95,250 = 24%

That’s 16 percentage points above your 60/40 target. Getting back there means trimming stocks by about 16% of the total portfolio, roughly $15,240.

You don’t have to sell it all in one move, though. Selling 10% of your equity holdings, around $7,230, brings your stock allocation down to 67%. Reinvest that $7,230 into bonds and here’s what happens:

– You lock in roughly $7,230 in gains
– Your portfolio moves closer to your actual risk target
– Future volatility exposure drops

None of this depends on timing anything. It depends on sticking with the plan.

Frequently Asked Questions

Should I rebalance my portfolio now, even if I’m not losing money?

Yes. Rebalancing isn’t reserved for downturns; it’s a tool for keeping risk under control. With markets up, your portfolio might be carrying more stock exposure than you realize. Rebalancing locks in gains and trims future volatility.

How often should I review my portfolio?

At least once a year. Plenty of financial advisors suggest every six months, especially after big market moves or major life changes. The CFPB treats annual reviews as a reasonable baseline.

What if I don’t know how to rebalance?

You’re not on your own here. SoFi, Chase, and Fidelity all offer automated rebalancing tools and free portfolio reviews.

Can I rebalance without paying taxes?

Yes, inside tax-advantaged accounts like IRAs or 401(k)s. In taxable accounts, selling can trigger capital gains, but you can still rebalance without selling by directing new contributions or transfers into underweighted assets.

How much of my portfolio should I rebalance at once?

Most advisors suggest moving 10-20% at a time. That keeps tax impact manageable and avoids overreacting to short-term market swings.

What should I do if I’m still scared of the market?

That’s a normal reaction. But fear shouldn’t be steering the decisions. Stick to your long-term plan, consider adding to bonds or cash, and remember the FDIC insures deposits up to $250,000.

Does rebalancing guarantee better returns?

No, nothing guarantees that. But it does improve consistency and cut down risk. Studies point to rebalancing adding 1-3% annually to long-term returns, even after taxes and fees.

Should I rebalance during a bull market?

Yes, actually the best time for it. Emotions run low, markets are climbing, and you can act without panic. Waiting for a downturn usually means you’ve waited too long.

How do I know if my portfolio is too risky?

Look at your asset allocation. Stocks above 70% of the total, especially close to retirement, usually signals too much risk. The Federal Reserve notes that investors tend to get too aggressive when markets rise and too cautious when they fall.

Can I use a robo-advisor to help with rebalancing?

Yes. Robo-advisors such as SoFi and Vanguard rebalance automatically based on your risk profile and goals, and they do it at low cost.