Experts Urge 401(k) Rebalancing as S&P 500 Nearly Quadruples in 10 Years

1 articles · Updated · USA TODAY · May 16

Retirement advisers say DIY 401(k) savers should check whether soaring stocks have pushed portfolios beyond their intended risk levels and, if so, trim equities and add bonds or cash.
The warning follows a decade in which the S&P 500 nearly quadrupled while bonds stayed relatively flat, leaving many once-balanced portfolios heavily tilted toward stocks.
That drift matters most for people nearing retirement, because a 100% stock allocation can suffer sharp losses in a correction—experts point to the Dow's more-than-50% drop in 2008.
Common guideposts include rebalancing when an asset class moves 5 percentage points from target and reviewing holdings every 90 days, six months or annually.
Target-date and other all-in-one funds already rebalance automatically, while DIY investors can adjust by redirecting new contributions, changing allocations or selling overweight positions.

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