Learn
Over time, the better-performing assets grow to occupy a larger share of a portfolio, drifting it away from the intended risk level. Rebalancing sells some of what grew and buys what lagged to restore the target allocation, typically once a year. It enforces a disciplined "sell high, buy low" habit and keeps risk where you set it.
If a 60/40 portfolio drifts to 72/28 after a strong year, rebalancing trims stocks back to 60%.
Portfolio drift is inevitable. Rebalancing is the discipline of bringing your allocation back in line — selling what has grown and buying what has lagged. Here is how to do it without overcomplicating it.
Read article →Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →