How the portfolio rebalancing calculator works
Over time, assets that grow faster take up a bigger share of your portfolio, which changes its risk. Rebalancing moves money back to the mix you chose.
Trade = Target value − Current value (positive = buy, negative = sell)
Drift = |Current % − Target %|
The trades always sum to zero, so you can rebalance by selling what is overweight and buying what is underweight. If you are adding new money, direct it to the underweight assets first; that can avoid selling and the taxes that come with it in a taxable account.
Worked example
A $100,000 portfolio has $72,000 in stocks, $23,000 in bonds and $5,000 in cash, against a 60/35/5 target. Stocks are 72%, a 12-point drift. To rebalance, sell $12,000 of stocks and buy $12,000 of bonds; cash is already at 5%.
Frequently asked questions
How often should I rebalance?
Studies by Vanguard and others find annual or threshold-based rebalancing (for example a 5-point drift) works about as well as more frequent schedules, with fewer trades.
Does rebalancing increase returns?
Its main job is controlling risk. It may slightly lower returns in long bull markets because it trims stocks.
Will rebalancing trigger taxes?
Selling in a taxable account can create capital gains. Use new contributions or tax-advantaged accounts where possible.
What allocation should I use?
That depends on your goals, time horizon and risk tolerance. A financial adviser or a target-date fund's mix can be a starting point.
Updated October 2026. Results are estimates for education, not financial or medical advice. All math runs in your browser; nothing you type is sent anywhere.