Rebalancing

general

Rebalancing is the process of realigning the proportions of assets in a portfolio to maintain a desired target allocation. Over time, different assets grow at different rates, causing the portfolio to drift from its original allocation. Rebalancing involves selling assets that have become overweighted and buying those that have become underweighted. It is typically done quarterly or annually.

Related Terms

Diversification Dollar-Cost Averaging (DCA)

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