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When Should You Use This?
Rebalance your portfolio quarterly or whenever an asset drifts more than 5% from its target allocation. Rebalancing enforces discipline by selling high and buying low — the opposite of emotional investing.
How It Works
1
Enter Current Holdings
Input your total portfolio value and the current dollar amount in each asset class.
2
Set Target Allocation
Enter your desired percentage for each asset. Make sure they add up to 100%.
3
Execute Trades
The calculator shows exactly how much to buy or sell in each asset to reach your target.
Frequently Asked Questions
Most advisors recommend quarterly or annually. You can also use threshold-based rebalancing: rebalance whenever an asset drifts more than 5% from its target.
Rebalancing primarily manages risk by preventing one asset from dominating. It can also add 0.5-1% annual return through the 'rebalancing bonus' of systematically buying low and selling high.
Selling winners triggers capital gains tax. Consider rebalancing within tax-advantaged accounts (IRA, 401k) or using new contributions to bring allocations back in line.
A common rule of thumb: hold your age in bonds (e.g., 30 years old = 30% bonds, 70% stocks). Adjust based on your risk tolerance and goals.
If you hold crypto, most advisors recommend limiting it to 1-5% of your total portfolio due to its high volatility.