What is one standard practice following portfolio rebalancing?

Following portfolio rebalancing, one standard practice is the documentation of the new asset allocation. This step is crucial because it creates a clear record of the updated strategy and allows for future reference. Documenting the new allocation helps financial planners and investors maintain accountability and track the performance of the portfolio over time. It also serves as a benchmark for future assessments and adjustments, ensuring that the portfolio remains aligned with the investor’s goals and risk tolerance.

The other options do not typically characterize a standard practice following rebalancing. For example, immediate withdrawal of all funds is an extreme measure that generally doesn’t align with the goals of rebalancing, which aims to maintain a strategic allocation, not liquidate everything. Periodic reassessment of risk tolerance is an ongoing process, typically conducted separately from the rebalancing action itself, while complete liquidation of underperforming assets may lead to unfavorable tax implications and does not necessarily reflect a considered approach to portfolio management. Thus, documenting the new asset allocation is the most appropriate standard practice after rebalancing.