top of page

Rebalancing Your Portfolio in the New Year

Updated: Jan 17

Rebalancing your investment portfolio is an important part of managing your wealth. At the beginning of each year, it's essential to review your holdings and make any adjustments that are necessary to ensure you're meeting your financial goals. In this blog post, we will discuss why portfolio rebalancing is so important and how you can go about doing it.

Why You Should Rebalance Your Portfolio Annually

Rebalancing your portfolio is a smart move for several reasons. First, it allows you to adjust your asset allocations according to changes in the market or changes in your own personal risk tolerance or financial goals. It also helps keep you from taking on too much risk—by making sure that no one asset class dominates your holdings—and ensures that you have a diversified portfolio with a mix of stocks, bonds, and other investments. Finally, rebalancing forces you to periodically review your holdings and make sure they still align with what you want to achieve.

How to Rebalance Your Portfolio

Let's start by saying that we think this should be done with a Financial Advisor and that every case is different.

The first step in rebalancing is deciding on an appropriate asset allocation strategy—how much of each asset class should be included in your portfolio? This should be based on factors such as age, risk tolerance, investment goals, time horizon (short-term vs long-term), etc. Once that is determined, it’s time to actually rebalance the portfolio by selling off assets that have become overweight (i.e., those which now account for more than their desired percentage of the total) and buying assets that have become underweight (i.e., those which now account for less than their desired percentage). For example, if stock prices rise significantly during the year but bond prices remain steady, then stocks may account for too large a portion of the total portfolio; conversely if stock prices fall but bond prices remain steady then stocks may account for too small a portion of the total portfolio.

Rebalancing your investment portfolio on an annual basis

It is an important part of managing your wealth and ensuring that it remains properly diversified and aligned with your financial goals. By regularly reviewing and adjusting your holdings at the beginning of each year, you can help ensure that you stay on track towards achieving those goals while minimizing risk along the way. Remember that there are plenty of professional advisors out there who can help guide you through this process every step of the way!

To contact our Wealth & Asset Management Team:


San Juan, Puerto Rico | Headquarters

Av. Ponce de León 252.

Citi Torres Suite 1403

San Juan, PR 00918






Lyon Bern, LLC is a Registered Investment Adviser and is in the business of consulting and advising its clients in wealth and asset management. Each client's diversification between Lyon Bern's portfolios will be made individually and based on the client's Investment Policy Statement. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product referred to directly or indirectly in this document will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Lyon Bern, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional investment advisor. A copy of our current written investment advisory agreement discussing our advisory services and fees is available for review upon request.

bottom of page