The concept of risk versus reward is built into the very fabric of our investing system. You should earn a higher rate of return if you are willing to take on more risk. For example, despite our growing national debt, there is no chance of the federal government defaulting on debt. So, the risk free rate of return that everyone can expect is the return on a United States T-Bill. From their, the amount of risks you take with your investing only go up.

In every professional sport, there’s a concept of a “rebuilding year.” These are the years where the team is working on drafting good prospects, building up their young talent, and crafting a competitive championship-caliber team piece by piece. It’s difficult to field a championship team every year for more than a few years, with free agency and everything, so it’s expected that after a few years of stellar performance, you’re bound to have a few leaner years where you’re rebuilding your talent.

I have to admit that I have not rebalanced my investment portfolio in years. I always seem to forget to mark a date on the calendar to look at my asset allocations and the balance that I have between stocks and bonds, their investment locations (foreign or domestic), and their capitalization.

Earlier this year, I added my investment portfolio to the group of reports I publish on Consumerism Commentary on a regular basis. Every three months, I share my investment balances and performances. I include Quicken’s calculation of the year-to-date average annual rate of return for an idea of how each investment is performing this year.
I add to my investments periodically, depending on the investment type.