Rebalancing

Over time, your portfolio drifts as some investments grow faster than others.
Rebalancing means adjusting your holdings to restore your target allocation.

Why Rebalance

• Prevents your portfolio from becoming too risky or too conservative.
• Locks in gains by selling assets that grew faster.
• Ensures your strategy stays aligned with your goals.

How to Rebalance

• Time-based — rebalance every 6 or 12 months.
• Threshold-based — rebalance when an asset class shifts more than 5–10% from target.
• Hybrid — combine both approaches.

Example

If stocks rise and now make up 70% of your portfolio (target was 60%), you sell some stocks and buy bonds to restore balance.