Portfolio Rebalancing
Calculator

It brings your asset allocation back to your original target percentages by selling portions of holdings that have grown to be overweight and buying more of those that have become underweight, keeping your risk level consistent with your plan.

Different asset classes grow at different rates; if stocks rise faster than bonds, for example, stocks will naturally become a larger share of your portfolio than you originally intended, even without you buying or selling anything.

It compares your current dollar amount in each asset class to your target percentage of the total portfolio value, and calculates the dollar amount needed to move each holding back to that target percentage.

Yes, selling appreciated assets in a taxable account can trigger capital gains tax, and frequent trading can incur fees, so many investors rebalance using new contributions first before selling existing holdings, or do it within tax-advantaged accounts.

Common approaches are rebalancing on a fixed schedule, such as annually, or only when an allocation drifts beyond a set threshold, like five percentage points, since rebalancing too often can add unnecessary costs without meaningfully reducing risk.