Rebalancing your investments each year helps to reduce undue risk from building up in your portfolio.
Each of your individual shares will perform differently and fluctuate in value relative to each other over time. If one share performs particularly well it will eventually form a greater share of your overall value when compared to other shares in your portfolio.
This places greater emphasis on that one share from affecting the overall performance of your portfolio.
By rebalancing your plan each year we are selling some of your shares that have performed well and buying other shares that have not performed as well. This buy low sell high philosophy sounds very simple, but it will ensure that you hold a relatively equal proportion of each share in the portfolio, thus spreading your risk around a diverse number of companies and industries that make up the FTSE 100.