Finveda Blog
Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original desired level of asset allocation.
How Model Performs against traditional Investment
- Risk of loss is negligible.
- Average Return in line with Equity.
- Average return suggest wealth compounding effect.
- On an Average, the corpus doubles 5 year. (Longest period of doubling the corpus is 7.4 year).
- Upside Risk search for Opportunities.
- Downside Risk Mitigate Negative Events.
For Example - If current composition is 40% Directional Equity, 25% Arbitrage & 35% debt and maybe due to sharp fall in markets (like say demonetization), the model suggests that we should increase the Directional equity to 44%, in this case we will rebalance by increasing equity and reducing from other asset classes on a daily basis and get the advantage of averaging. We need not to wait till month end or quarter end to do so.
