Investing Basics

What Is Rebalancing?

Rebalancing is the process of buying or selling assets to return a portfolio to its target asset allocation after market movements have shifted the percentages. For example, if a 60/40 stock/bond mix drifts to 70/30, rebalancing moves it back toward 60/40.

Common Methods

Calendar rebalancing happens at set intervals; threshold rebalancing happens when an allocation drifts beyond a chosen band. Selling in taxable accounts can realize capital gains.

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% Percentage Calculator Three calculators in one: percentage of a number, percentage of total, and percentage change. Calculate → 📈 Capital Gains Tax Calculator Compare short-term vs. long-term capital gains tax. Calculate →

🔗 Related Terms

Asset Allocation Diversification Capital Gains Tax

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.