⚖️ Portfolio Rebalancing Calculator
Restore your target asset allocation model. Calculate exact buy and sell trades, with or without new incoming cash deposits.
Asset Holdings & Target Weights
| Asset / Ticker | Current Value ($) | Target Weight (%) | Remove |
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Rebalancing Action Plan
| Asset | Current Weight | Target Weight | Action Required | Trade Amount | Target Value |
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Avoiding the Momentum Drift Trap
Without rebalancing, a bull market can swell a 60/40 equity-to-bond portfolio into an 85/15 posture, leaving you exposed to severe volatility right before a market peak. Regular rebalancing dampens portfolio drawdowns and improves risk-adjusted Sharpe ratios over market cycles.
Frequently asked questions
What is portfolio rebalancing?
Portfolio rebalancing is the process of realigning the weightings of assets in your portfolio by periodically buying or selling assets to maintain your desired risk-and-return profile.
How often should you rebalance your investment portfolio?
Most financial planners recommend rebalancing either on a calendar schedule (annually or semi-annually) or on a tolerance-band threshold (whenever an asset class deviates by 5% or more from its target).
Can you rebalance using new cash contributions without selling?
Yes. Cash-flow rebalancing directs new savings, dividends, or deposits into underweight assets, re-aligning your portfolio without triggering taxable capital gains from selling winning positions.
Why is rebalancing mathematically advantageous?
Rebalancing forces you to systematically 'sell high and buy low', taking profits from outperforming, overvalued assets and allocating into undervalued, lagging sectors.