What strategy can be used in the rebalancing process?

Selling high-performing assets as a strategy in the rebalancing process is correct because rebalancing aims to maintain a desired asset allocation by realigning the proportions of various asset classes in an investment portfolio. Over time, certain assets may appreciate more than others, leading to an imbalance in the portfolio.

By selling high-performing assets, an investor can take profits and reduce exposure to that asset class, which may now represent a larger percentage of the overall portfolio than originally intended. The proceeds from these sales can then be used to purchase underperforming assets, helping to restore balance and potentially capitalize on future growth opportunities. This approach recognizes the principle of "buy low, sell high," aligning with the fundamental goal of managing risk and maintaining a diversified investment strategy.

The other choices proposed alternative strategies that do not align with the established principles of effective rebalancing. For instance, buying low-performing assets without considering market trends may lead to investing in assets that are declining for valid reasons, which contradicts the rebalancing strategy's focus on maintaining an optimal asset allocation. Ignoring the performance of individual assets would mean neglecting the very purpose of rebalancing, which is to make adjustments based on performance metrics. Lastly, shifting money equally across all asset types could distort