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Portfolio Rebalancing Planner

Plan portfolio rebalancing by calculating target allocations, current drift, and required trades to restore target weights.

Portfolio Rebalancing Planner

Plan portfolio rebalancing by calculating target allocations, current drift, and required trades to restore target weights.

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Guide

Planning portfolio rebalancing to maintain target allocations

Enter positions with current weight% and target weight%. Weights can be percentages (30) or decimals (0.30).
Drift = Current Weight - Target Weight. Positive drift means overweight (sell), negative means underweight (buy).
Rebalance when drift exceeds tolerance bands (e.g., ±5% or ±10% depending on policy). Large drifts increase tracking error and risk.
Consider transaction costs and taxes when rebalancing. Rebalance only when drift justifies the costs, or use threshold-based rebalancing.
Rebalance periodically (quarterly, semi-annually) or use threshold-based rebalancing (rebalance when drift exceeds bands).

Frequently Asked Questions

Portfolio rebalancing, drift management, and allocation maintenance

What is portfolio rebalancing?

Rebalancing is the process of adjusting portfolio allocations back to target weights by buying underweight positions and selling overweight positions.

Why does drift occur?

Drift occurs when different assets appreciate or depreciate at different rates, causing weights to shift away from targets even without new contributions or withdrawals.

When should I rebalance?

Rebalance when drift exceeds tolerance bands (e.g., ±5% or ±10%), periodically (quarterly/annually), or when portfolio composition changes significantly.

What are rebalancing costs?

Rebalancing costs include transaction fees, bid-ask spreads, taxes on realized gains, and opportunity costs. Consider these when deciding rebalancing frequency.

Should I rebalance exactly to targets?

Not always. Consider tolerance bands to reduce transaction costs. Rebalance to targets only when drift exceeds bands, or use threshold-based rebalancing.

How do I handle taxes when rebalancing?

In taxable accounts, rebalancing creates realized gains. Use tax-loss harvesting, rebalance in tax-advantaged accounts first, or use new contributions to adjust allocations.

What is threshold-based rebalancing?

Rebalance only when drift exceeds predefined thresholds (e.g., ±5% or ±10%), reducing transaction costs while maintaining reasonable alignment with targets.

Can I use new contributions to rebalance?

Yes. Direct new contributions to underweight positions to rebalance without selling, avoiding transaction costs and taxes in taxable accounts.

How often should I check for rebalancing?

Check monthly or quarterly. Rebalance when drift exceeds thresholds or periodically (quarterly/annually), depending on your policy and transaction cost considerations.

What if I cannot rebalance due to constraints?

If transaction costs or taxes are prohibitive, accept some drift or use new contributions to gradually restore targets. Update target allocations if constraints are permanent.

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Portfolio Rebalancing Planner

Plan portfolio rebalancing by calculating target allocations, current drift, and required trades to restore target weights.

How to use Portfolio Rebalancing Planner

Step-by-step guide to using the Portfolio Rebalancing Planner:

Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Portfolio Rebalancing Planner?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Portfolio Rebalancing Planner is designed to be user-friendly and provide instant calculations.

Is the Portfolio Rebalancing Planner free to use?

Yes, the Portfolio Rebalancing Planner is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Portfolio Rebalancing Planner is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Portfolio Rebalancing Planner accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.