Tax Planning

Rebalancing Your Portfolio Can Assist With Good Tax Planning

EP950 – Rebalancing Your Portfolio Can Help With Smart Tax Planning | The Money Show
09 FEBRUARY 2022 08:28 IST | ET NOW | 12MIN 52SEC

Asset allocation is a key tenet of good financial planning. Advisors often say it is the cornerstone of your finances and is much more important that choosing the right financial instruments. A big part of maintaining an asset allocation strategy is to rebalance your portfolio on a regular basis. This involves setting rules that govern when and how a portfolio must get rebalanced. These rules help an investor to take logical decisions – adding more equity when the chips are down and booking profit when markets are booming. What’s more, taking these decisions can help in the process of ‘tax harvesting’ – a method that makes tax planning for your investments more efficient.

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