As you have read in our communications over the past few weeks, as part of our normal investment process, we will be looking to rebalance portfolios in the coming days. The purpose of rebalancing is to help you stay on course with your long-term investment strategy.
The inevitable volatility of the markets throws off the target asset allocation of the stocks, bonds and cash that make up your portfolio. Because your target allocation was designed to help you reach your goals, we follow a disciplined approach of rebalancing. Rebalancing is the process of buying low and selling high certain assets in your portfolio to readjust the allocation of each asset class back to its desired percentage. Our research-based investment philosophy integrates market fluctuations and tells us that it is just as important to rebalance in down markets as it is in up markets. Market down-turns provide long-term investors the valuable opportunity to buy equities at lower prices.
Rebalancing is about the big picture—keeping perspective on your investment time horizon and your risk tolerance. While we understand that events can cause anxiety, we feel it is important to maintain a rebalance discipline and not be influenced by the ups and downs of the market.
We plan to begin the process on Tuesday, April 7th and understand that some of you might have questions or even concerns about this strategic decision. If you would like to discuss this, please let us know by Monday, April 6th.
Wishing you and your family good health,
The Meritas Team