Portfolio Rebalancing Calculator
Markets drift your allocation off target. Enter each holding's current value and its target percentage — add new cash if you like — and see exactly how much to buy or sell to get back in balance.
The Action column next to each holding shows how much to buy or sell to hit its target. Sells free up cash; buys deploy it. Together they bring every position back to your intended mix.
Estimates are for illustration and education only — not financial advice. Selling holdings can trigger taxes and transaction costs; consider rebalancing with new contributions where possible.
Why and how to rebalance
Rebalancing means returning your portfolio to its target mix after market moves have pushed it out of shape. If stocks surge, they can grow from a planned 60% to 70% of your portfolio — leaving you with more risk than you signed up for. Rebalancing trims what's grown and tops up what's lagged.
It enforces "buy low, sell high"
By design, rebalancing sells slices of whatever has run up and buys more of whatever has fallen behind. It's a disciplined, unemotional way to keep your risk level steady and, over time, can modestly improve returns.
Rebalance with new money first
Selling can trigger capital-gains taxes and trading costs. Where possible, rebalance by directing new contributions toward your underweight assets instead of selling the overweight ones — add cash above and the calculator will favour buys. In tax-advantaged accounts, selling to rebalance is usually tax-free.
How often?
Many investors rebalance once or twice a year, or whenever an allocation drifts more than about five percentage points from target. Doing it constantly just racks up costs.
To project where your rebalanced portfolio is headed, use the portfolio growth calculator.
How the rebalancing trades are worked out
For each holding, the calculator finds the dollar amount your target percentage should represent, then compares it to what you hold now. The difference is the trade.
Two ways to rebalance
You can bring a portfolio back to target by trading what you hold, or by steering new money — each has a place.
With new cash tax-friendly
- Direct fresh contributions to underweight assets
- Avoids selling, so no capital-gains tax is triggered
- Ideal for the accumulation phase while you're still investing
- May not fully correct large drifts on its own
By selling & buying precise
- Trims overweight assets and tops up underweight ones
- Corrects any degree of drift immediately
- Best inside tax-advantaged accounts where sales are tax-free
- In taxable accounts, can create a tax bill and trading costs
Why bother at all? Left alone, a winning asset grows to dominate your portfolio, quietly raising your risk beyond what you chose. Rebalancing restores your intended risk level — and, by trimming winners and buying laggards, enforces a disciplined "sell high, buy low" that emotion usually fights.
Thresholds beat the calendar. Rather than rebalancing on a fixed date, many investors act only when an allocation drifts more than about five percentage points from target. It cuts needless trading while still keeping risk in check.
How often, and why
Common rebalancing approaches and what they trade off. There's no single right answer — consistency matters more than the exact rule.
| Approach | Frequency | Best for |
|---|---|---|
| Calendar | Once or twice a year | Simplicity & routine |
| Threshold | When drift > ~5 pts | Fewer, smarter trades |
| Cash-flow | With each contribution | Tax-efficient accumulation |
| Hybrid | Check yearly, act on drift | Most long-term investors |
Guidelines, not advice. Over-rebalancing racks up costs and taxes for little benefit; ignoring it entirely lets risk creep up. A yearly check with a drift threshold suits most people.