What is portfolio rebalancing?

Portfolio rebalancing is the process of restoring your asset allocation to the target mix you set. It usually means selling assets that have grown overweight and buying assets that are underweight.

What is a rebalancing threshold?

A threshold is a tolerance band around your target allocation. Actions are suggested only when the current allocation moves outside this band.

Why does a contribution change the targets?

New cash increases the total portfolio value, so each target value is calculated from the portfolio plus contribution.

What if my target percentages do not sum to 100?

The calculator requires a full 100 percent target mix. Adjust your targets so the total equals 100 percent.

Do I need to sell when I add new money?

Not always. A contribution can cover some or all buy needs, but assets above target may still require selling to align with the target mix.

Why are some assets marked buy or sell?

When the portfolio is outside your threshold, the calculator assigns buys to underweight assets and sells to overweight assets so the total returns to the target mix.

How often should I rebalance?

Many investors check once or twice per year or use a threshold trigger. The right cadence depends on your goals, taxes, and trading costs.

What does no action mean?

No action means the asset is within your threshold so rebalancing is not suggested for that asset.

Portfolio Rebalancing Calculator — Keep allocations aligned with your targets

Current portfolio total value

New contribution

Rebalancing threshold

Currency

Assets

Asset name

Target allocation percent

Current value

Results summary

Your portfolio needs $3,510 in buys and $1,010 in sells to reach targets above the 2 percent threshold.

Total portfolio value

$67,450

Total target value

$69,950

Threshold

Contribution

$2,500

Current allocation

Equities63.0%$42,500
Bonds17.0%$11,500
Crypto14.8%$9,950
Cash5.2%$3,500

Target allocation

Equities65.0%$45,467.50
Bonds15.0%$10,492.50
Crypto15.0%$10,492.50
Cash5.0%$3,497.50

Contribution usage

Total buys

$3,510

Total sells

$1,010

Contribution used

$2,500

Remaining contribution

Sells needed after contribution

$1,010

Rebalancing actions

Asset	Target percent	Current percent	Current value	Target value	Action	Amount
Equities	65%	63.01%	$42,500	$45,467.50	Buy	$2,967.50
Bonds	15%	17.05%	$11,500	$10,492.50	Sell	$1,007.50
Crypto	15%	14.75%	$9,950	$10,492.50	Buy	$542.50
Cash	5%	5.19%	$3,500	$3,497.50	Sell	$2.50

About this portfolio rebalancing calculator

This calculator helps you check whether your portfolio is still aligned with your target mix and estimates how to bring it back in line. It shows the size of each drift, the buy or sell action that would close the gap, and how much of the buying can be covered by a new contribution.

How the rebalancing math works

We total your current asset values to get the portfolio value. Each target value is the target percent of the total after adding any contribution. We then calculate the gap between current and target weights and propose buy or sell amounts to bring the mix back on target. Actions are shown when the overall deviation exceeds your threshold.

How to use the results

Know what this rebalancing calculator can do

Checks current allocation across each asset in your portfolio.
Compares deviations from your target mix to guide rebalancing.
Shows how much to buy or sell for each asset class.
Explains how a cash contribution can reduce the need to sell.

What portfolio rebalancing means

Portfolio rebalancing is the process of bringing your asset allocation back to your intended mix. If a 60 40 portfolio drifts to 70 30, rebalancing means trimming the overweight asset and adding to the underweight one.

Many investors use the term portfolio review for any check in. A review can include performance, fees, and goals. Rebalancing is more specific. It focuses on returning the weight of each asset to your target range.

How rebalancing works in practice

You compare your current allocation with your target allocation. When the deviation is large enough, you reduce assets that have grown too large and add to assets that have fallen behind. This helps keep risk steady and can encourage a sell high buy low habit over time.

Rebalancing does not try to predict markets. It is a rules based way to keep your plan stable as markets move. That stability is especially useful when one asset class outpaces the rest for a long period.

Choosing a rebalancing threshold

A common starting point is a 5 percent deviation for any asset. This is a practical rule of thumb to avoid over trading while still keeping your mix aligned.

Lower thresholds may increase trading and taxes, while higher thresholds can allow larger drifts. The right level depends on your goals, time horizon, and tolerance for variance.

How to rebalance your portfolio

Enter current values: list your assets and their current values.
Set target weights: make sure targets add up to 100 percent.
Add new contribution: see how much new cash can fund the buys.
Review actions: use the table to decide which assets to buy or sell.

If your contribution covers all required buys, you may not need to sell at all. If it does not, the calculator shows how much selling is still required to rebalance fully.

Why rebalancing matters

It keeps your portfolio risk aligned with your plan.
It helps lock in gains and add to underweighted assets.
It prevents a single asset from dominating your portfolio.
It brings your portfolio back to the mix you originally chose.

How often should you rebalance

Many investors check once or twice per year, while others use a threshold trigger and rebalance only when drift is large. A calendar check is simple, but a threshold based approach can reduce unnecessary trades.

Example you can model

Suppose you target 65 percent equities, 15 percent bonds, 15 percent cash, and 5 percent real estate. After a strong equity run your mix might move to 70 percent equities and 12 percent bonds. The calculator shows the buy and sell amounts needed to return to target weights.