With stocks at near record-high valuations and economic uncertainty building, many investors are wondering if now is the time to take some profits and rebalance their portfolio. The question is doubly pressing because while the S&P 500 surged more than 20% last year, just 10 stocks make up more than 35% of the index, signaling the market may be more fragile than it appears.
The answer on rebalancing is, of course, different for every investor, and depends on your goals, risk tolerance, current asset allocation, and so on. But some certified financial planners (CFPs) are saying that it might make sense to consider moving away from mega-cap tech stocks toward other sectors and smaller companies. While no one can predict the future, high valuations often lead to lower long-term returns.
