How often should I rebalance a portfolio of funds?

Once or twice a year is plenty for most investors, or whenever an asset class drifts far from its target. Rebalancing means selling a little of what's grown and buying what's lagged to restore your chosen stock-bond mix — say, back to 70/30. It matters because a strong stock run can quietly turn a moderate portfolio into an aggressive one, raising your risk just as a downturn becomes more likely. A common, low-effort approach: check annually, and rebalance only if any holding has drifted more than about five percentage points from target. Inside a 401(k) or IRA, rebalancing triggers no taxes, so do it freely there; in a taxable account, prefer redirecting new contributions or using dividends to rebalance and avoid selling. Target-date funds rebalance for you automatically. Set and check your targets at wealthserene.com/tools/portfolio-builder.