Is your 401(k) or other retirement plan set to automatically rebalance?
An auto-rebalance normally occurs quarterly or semi-annually, and with the end of the second quarter approaching, it’s important for you to check if this feature is turned on and investigate how your funds may change as a result.
Auto-rebalancing can be a positive feature in 401k plans if you are not paying close attention to your investments, or if you are attempting to implement a “Set it and Forget It” strategy.
We usually discourage our clients from using the auto-rebalance feature because our process entails comprehensive portfolio review every quarter, which consistently evaluates your investment holdings in relation to your overall financial situation and market conditions. Also, your 401(k) plan may have changed the fund choices since you last reviewed your 401(k), which may mean you have better investment options. You wouldn’t be aware of the changes to your investment options if you relied on an auto-rebalance.
If you have any questions about auto-rebalancing or investment management, please contact us today.
