Rebalancing is Difficult for many investors because it represents a contrarian strategy.

Question

Quizplus · Accepted Answer

Rebalancing involves selling parts of the portfolio that have performed well and buying assets that have underperformed in order to maintain the desired asset allocation. This goes against the natural tendency to hold on to winning investments and sell losing ones, which can make it difficult for many investors to implement.

Rebalancing Is Difficult for Many Investors Because It Represents a Contrarian