How to Review and Rebalance Your Portfolio
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What should you consider when reviewing and rebalancing your portfolio?
So soon be time to review and perhaps rebalance your portfolio. But how should you do it? That and more on this Saturday Personal Finance edition of Motley Fool Money. I'm Robert Brokamp, and this week I speak with financial planner Sean Gates about how to evaluate and perhaps adjust your portfolio as we prepare to enter a new year. But first, let's highlight some insights from some recent publications. You know, it's a time of year when many financial services firms issued their 2026 outlooks. Many are available, and I find them all interesting, but I'll just highlight a few takeaways from the recent publication of Schwab's Outlook for Stocks and the Economy, co-written by Lizanne Saunders and Kevin Gordon.
One of the themes of the report is the ongoing K-shaped economy, so-called because the divergence in fortunes between higher-income Americans, who are doing pretty well,
What insights can we gain from Schwab's 2026 economic outlook?
and lower-income Americans who are struggling due to affordability challenges and job uncertainty. The economy next year will continue to be in what Schwab calls a vibe-pression, a dour consumer sentiment while GDP continues to grow. To illustrate this, the report cited an unprecedented divide between increasing unemployment expectations per the University of Michigan's Consumer Sentiment Survey, which tends to survey more working-class respondents with, you know, kitchen table concerns, and the unusually upbeat outlook for the stock market from the Conference Board Consumer Confidence Survey, which tends to have more higher income respondents. As the report stated, quote, the result is a split personality and confidence textbook K, end of quote.
One reason the economy may continue to grow despite this vibe oppression is the stimulus from the one big beautiful bill passed in July, which is projected to add 0.7% to GDP in 2026 and close to that in 2027, but at the cost of accelerating borrowing from Uncle Sam.
How does inflation impact household budgets and spending?
The Schwab report estimates that the percentage of federal debt to GDP will rise to more than 125% over the next decade, whereas it would have been just, and I put that just in air quotes, a bit over 115% without the bill. One other tidbit from the Schwab report, the second year of a presidential term is usually the weakest for the stock market. Since 1928, the second year is profitable 54% of the time compared to an average of 67% for all four years with an average return of 3.3%. For our next item, we'll continue on the theme of inflation with a recent MarketWatch article from Alicia Munel of the Center for Retirement Research at Boston College. According to Munel, prices have risen 25% in total over the past five years.
However, the three biggest items in most household budgets, housing, transportation, and food, have risen more. Incomes, meanwhile, have risen 27%. So while wages may have been keeping up with overall prices, Minal writes that, quote, standing still is not enough.
What myths exist about retirement and life expectancy?
Most would like to see their standard of living improve over a five-year span. Thus, they feel like they're falling behind. End of quote. And now the number of the week, which is 67.8. That was the average age of death of Boeing employees who retired at age 65, whereas employees who retired at age 55 lived to 83. In other words, retire sooner, live longer. There's only one problem. It's not true. These stats come from a graphic that has been passed around the internet for a long time, including recently, but it was debunked more than 20 years ago. Retirement expert Michael Finca recently wrote an article about it for the website ThinkAdvisor, and with the help of fellow researcher David Blanchett, looked at the actual relationship between retirement and life expectancy.
Using the University of Michigan's Health and Retirement Study, they looked at the retirement status of participants in 2012 and what percentage were still alive a decade later. However, it's important to take health into account because many people retire sooner due to health issues, which can also result in them dying sooner.
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Chapters
8 chapters
1
What should you consider when reviewing and rebalancing your portfolio?
0:04–0:54
2
What insights can we gain from Schwab's 2026 economic outlook?
0:54–1:53
3
How does inflation impact household budgets and spending?
1:53–2:54
4
What myths exist about retirement and life expectancy?
2:54–4:12
5
How can you effectively analyze the health of your portfolio?
4:12–5:53
6
What strategies should you use for portfolio rebalancing?
5:53–6:33
7
How important is benchmarking your portfolio against indices?
6:33–11:25
8
What year-end financial planning tips should you know?
11:25–22:06