Investment 101: How to rebalance your portfolio for FY27 - top mistakes to avoid

Portfolio rebalancing realigns asset allocation with financial goals and risk appetite as asset class returns cause drift from original mix.

Investors should review goals and risk tolerance for FY27 due to possible changes in income, life stage, or market conditions.

A common mistake is replacing mutual funds based solely on short-term underperformance, which can disrupt long-term strategy.

Rebalancing prevents a single high-performing stock or sector from dominating the portfolio and trims overvalued assets.

The process involves periodic review of asset allocation (e.g., 70% equity, 30% debt) to ensure it matches current needs.