Portfolio Risk & Return
Rebalancing
Bringing a portfolio back to its intended mix after market moves have pushed it off course. If a 60/40 portfolio drifts to 70/30 after a stock rally, rebalancing means selling some stocks and buying bonds to restore 60/40. The idea is to keep the portfolio’s risk where it was designed to be, rather than letting the best performer quietly take over. Some investors rebalance on a calendar, others when a weight drifts past a set band. The trade-offs are practical: each rebalance can mean trading costs and, outside tax-advantaged accounts, taxes on gains.
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Educational information, not investment advice. See it applied across the screener →