Portfolio Rebalancing Calculator

Calculate how to rebalance your investment portfolio to match target allocations. Get specific buy/sell recommendations.

Current total portfolio value

Current value in stocks/equities

Current value in bonds/fixed income

Current cash or money market

Desired % in stocks

Desired % in bonds

Desired % in cash

Current % = (Asset Value / Total Portfolio) * 100\nTarget $ = Total Portfolio * (Target % / 100)\nAction = Target $ - Current $\nDrift = Current % - Target %\n\nRebalance if:\n- Drift > 5% (threshold method)\n- Annual review (calendar method)
Example:\nPortfolio: $100,000\n\nCurrent:\n- Stocks: $70,000 (70%)\n- Bonds: $25,000 (25%)\n- Cash: $5,000 (5%)\n\nTarget: 60/35/5\n\nActions:\n- Stocks: SELL $10,000 (70% -> 60%)\n- Bonds: BUY $10,000 (25% -> 35%)\n- Cash: No change (5% -> 5%)\n\nDrift: Stocks +10% (significant)\nRecommendation: Rebalance now

What is portfolio rebalancing?

Rebalancing restores your target asset allocation by buying/selling assets. Example: Target 60/40 stocks/bonds drifts to 70/30 after stocks rise. Rebalance by selling 10% stocks, buying bonds to restore 60/40. Maintains desired risk level and forces "buy low, sell high."

How often should I rebalance my portfolio?

Strategies: Calendar (annually, quarterly), Threshold (when allocation drifts 5%+ from target), Hybrid (quarterly + 5% threshold). Annual rebalancing is most common. Too frequent = excessive fees/taxes. Too rare = risk drift. Most experts recommend annually or when drift exceeds 5%.

What are the benefits and costs of rebalancing?

Benefits: maintains risk level, prevents concentration, enforces discipline, may improve returns. Costs: trading fees, taxes on capital gains (in taxable accounts), time/effort. Tax-advantaged accounts (IRA, 401k) = no tax cost, ideal for rebalancing. Use new contributions to rebalance when possible.

What is a good asset allocation?

Depends on age, risk tolerance, goals. Common: 60/40 stocks/bonds (moderate), 80/20 (aggressive), 40/60 (conservative). Rule of thumb: bond % = your age (60yo = 60% bonds). Young investors: more stocks. Near retirement: more bonds. Adjust for risk tolerance.

Should I rebalance in a taxable account?

Weigh benefits vs tax costs. Minimize taxes by: using new contributions to rebalance, tax-loss harvesting (sell losers), waiting for long-term gains (>1 year), considering tax-managed funds. If rebalancing triggers large short-term gains, may wait or use dividends/contributions instead.