U.S. Treasuries rose dramatically Thursday, putting them on pace for the best monthly return since the credit crisis. Meanwhile, stocks are getting slammed due to weaker-than-expected economic data and concerns over Europe.

In other words, this is a portfolio rebalancer's dream.

There are a number of reasons why one should consider rebalancing before month-end:

  • A 10-year Treasury note purchased today would have a yield of just over 2%. One could likely do much better cashing in those gains for dividend paying stocks with a higher yield and a record of rising dividends.
  • Stocks are getting cheaper, even though 72% of all S&P companies have beaten earnings expectations for the current quarter.
  • There is still no evidence that the United States is heading for a recession, although growth is certainly lower than once believed.

Advisors get paid for thinking rationally during difficult periods. Rebalancing now will likely reap big rewards for clients in the coming months.

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