At a glance
- Benz, co-host of The Long View and author of How to Retire, said rebalancing is the direct way to remove risk because stocks outgrow other holdings.
- Younger clients should still hold most retirement assets in stocks, Benz said, but US large-growth stocks have outperformed almost everything else over five years, leaving portfolios tilted toward what has already run.
- Advisors can make the rebalancing review a December conversation, Benz said, resetting the equity weight against today's bond yields before 2027.
A 60/40 portfolio built five years ago would be roughly three-quarters equities today, Christine Benz said in Morningstar — Financial Advice's year-end checklist of five tasks for investors to complete before 2027.
Benz, co-host of The Long View and author of How to Retire, said rebalancing is the direct way to remove risk because stocks outgrow other holdings. For clients over 50 who are close to drawing on the money, Benz said, higher bond yields give a place to put the trimmed equity.
Younger clients should still hold most retirement assets in stocks, Benz said, but US large-growth stocks have outperformed almost everything else over five years, leaving portfolios tilted toward what has already run.
Advisors can make the rebalancing review a December conversation, Benz said, resetting the equity weight against today's bond yields before 2027.
Reported by the Tax & estate planning desk from Morningstar — Financial Advice. Published . Corrections