It’s been a volatile year for the market: These are the key things to know before rebalancing your portfolio

It may be time to re-balance your portfolio after the stock and bond markets had a rough year.

The S&P 500 Index and the U.S. bond market have both fallen in the year to date.

It's normal to choose an initial percentage of stocks, bonds and other assets based on risk tolerance and goals, according to a certified financialplanner.

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He said that as the markets fluctuate, the allocation of each type of asset may change.

If your target is 50% stocks and 50% bonds, the percentage could eventually drift to 70% stocks and 30% bonds, which is far riskier than the original allocation.

One of two strategies is used by investors to decide how often to rebalance.

He said that you can use a calendar-based timing method or make changes based on a set of rules.

There isn't a difference from a value perspective. It's really about balancing.

The big piece that can come with rebalancing your portfolio is tax-loss harvesting.

You can either trade one asset for another or add new contributions. The necessary changes are made in tax-deferred or tax-free retirement accounts.

In a down market, there may be other opportunities to be had.

Tax-loss harvesting, which allows you to offset profits with losses, is a piece of the puzzle that can help you with portfolio rebalancing.

The average investor may save tax-loss harvesting for the end of the year, but there have been several opportunities throughout the rest of the year.

Lawrence said it's important to consider the current economic conditions and what's expected to come.

He said that investors are more willing to accept risk in a bull market and less so in a bear market.