PT - JOURNAL ARTICLE AU - Jeffrey E. Horvitz TI - The Implications of Rebalancing the Investment Portfolio for the Taxable Investor AID - 10.3905/jwm.2002.320443 DP - 2002 Jul 31 TA - The Journal of Wealth Management PG - 49--53 VI - 5 IP - 2 4099 - https://pm-research.com/content/5/2/49.short 4100 - https://pm-research.com/content/5/2/49.full AB - Rebalancing is almost universally recommended as a method to control risk and to orient the investment portfolio to its appropriate risk/return point. The literature on rebalancing is effusive as to the benefits, but there is little commentary about the costs or the practical problems of implementation. Rebalancing is easiest with portfolios consisting of all liquid securities, which is the case with the conventional mix of stocks, bonds, and cash. Most institutional investors and many individuals include in their portfolio a substantial amount of illiquid investments such as private equity, venture capital, and real estate. These cannot be so easily rebalanced and there may be little point in rebalancing only those portions of a portfolio that are liquid, leaving the illiquid portions untouched.