Should you rebalance your portfolio?

It's a good idea to spread the risk in your portfolio by investing in different asset classes. But how often should you redress the balance? Tim Bennett explains.

An old investing rule of thumb among members of the (long-deceased) Birmingham Stock Exchange recommended you keep a third of your assets in equities, a third in bonds and a third in property. That way you avoid putting too many eggs in any one basket without spreading yourself too thinly.

While you may split your own wealth into a wider range of baskets, diversification makes sense. Indeed, Tim Price of PFP Wealth Group calls diversification the "only free lunch" in investing.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.