I have a confession. For a long stretch of my life, I owned one holding, and it was work.
I did not decide this. Nobody ever does. Work kept growing, the way a good share keeps rising, and I kept not looking. By the time I noticed, it took up most of my week, most of my thinking, and a worrying amount of my weekends. On paper, it was performing brilliantly. In practice, everything else I owned had shrunk to almost nothing.
Investors have a word for fixing this. They call it rebalancing, and it turns out to be one of the most useful ideas I have ever stolen from the markets.
How a Portfolio Drifts
When you build an investment portfolio, you usually choose a mix. A certain share goes into company shares, a certain share into bonds, perhaps a little into cash. Then the market does what markets do. One part grows faster than the others, and slowly, without you lifting a finger, your careful mix turns into something quite different.
Rebalancing means bringing it back. You trim what has grown too large and top up what has fallen behind. The US regulator’s investor education site describes rebalancing as returning to your original mix and notes that it tends to work best when done fairly infrequently, rather than every time the news gets loud.
The important word is drift. Nobody wakes up and decides to put everything into one asset. It just keeps going up, and you keep not looking.
My Four Holdings
When I finally sat down and looked at my life as a portfolio, I counted four holdings: money, health, people and time.
Work fed the first one well, which was the problem. It fed it so well that it quietly starved the other three. My health was the bond fund in my life: dull, steady, and invisible until I suddenly needed it. My friendships had become something I scheduled around everything else, which is a strange way to treat the one investment that never appears on a statement, and my time had stopped being mine. It belonged to whatever had overrun that day.
Trimming the Winner Feels Wrong
Here is why rebalancing is hard, in money and in life. It asks you to sell what is working. In a portfolio, that means taking profits from the share that has done brilliantly and moving them somewhere that looks, in the moment, far less exciting. Every instinct says keep riding the winner.
Life is no different. Turning down extra work that pays well feels irresponsible. Leaving on time feels like a confession of weakness. Spending a Saturday on people rather than projects can feel like money is being left on the table to some.
But concentration has a price, and investors know it. If everything you own sits in one holding, then when that holding falls, everything falls with it. A life that is almost entirely a job has no diversification at all. It looks magnificent right up until the day it does not, whether that day brings a restructure, an illness, or simply the slow realisation that you have become very good at one thing and absent from everything else.
How I Rebalance Now
These days I review my week roughly the way I review my investments: occasionally, calmly, and against a rough target rather than a rigid rule. I look at where the hours actually went, not where I intended them to go. If one holding has swollen, I trim it a little. If another has been neglected, I top it up, usually with something small and specific, such as a walk, a call, or an evening that genuinely ends.
I would love to tell you I now rebalance with serene discipline. I do not. I rebalance: I tidy a cupboard: rarely, then all at once, and then with surprising satisfaction. I am still amending the mix. I expect I always will be.
A Quality Life Is a Diversified One
Wealth was never meant to be the whole portfolio. It’s the part that pays for the rest. The aim, at least the one I keep coming back to, is a life with several things growing at once: money, yes, but also strength, company, and hours that belong to you.
So here is the question I now ask every few months, and I offer it to you as a friend rather than an adviser. If your life were a portfolio, what would the statement say? And which holding has been quietly taking over while you weren’t looking?
The Jacqueline Brand: knowledge builds confidence; confidence builds wealth.
This is editorial commentary for information and education only. It is not financial, investment or professional advice, and nothing here is a recommendation to buy or sell any investment. The Jacqueline Brand is not authorised or regulated by the Financial Conduct Authority. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Figures were correct at the time of publication. Always do your own research and consider speaking to a regulated adviser.
