Portfolio Rebalancing Calculator
Calculate how to rebalance your portfolio to match target allocations.
See the exact dollar amount to buy or sell for each asset class in one view.
Portfolio rebalancing is the process of realigning the weightings of assets in a portfolio to match a target allocation that has drifted due to different rates of return across asset classes. Left unchecked, a portfolio’s actual risk profile diverges from the investor’s intended risk profile.
Drift calculation:
Current Weight (%) = Asset Value ÷ Total Portfolio Value × 100
Drift = Current Weight − Target Weight
Rebalancing trade calculation:
Target Asset Value = Total Portfolio Value × Target Weight
Trade Amount = Current Asset Value − Target Asset Value
Positive = sell excess; Negative = buy to increase position.
Worked example: Portfolio: $200,000 total. Target: 60% stocks / 30% bonds / 10% cash
After a strong stock rally:
| Asset | Current Value | Current % | Target % | Drift |
|---|---|---|---|---|
| Stocks | $136,000 | 68% | 60% | +8% |
| Bonds | $54,000 | 27% | 30% | −3% |
| Cash | $10,000 | 5% | 10% | −5% |
Rebalancing trades:
- Sell stocks: $136,000 − ($200,000 × 60%) = Sell $16,000
- Buy bonds: $60,000 − $54,000 = Buy $6,000
- Buy cash: $20,000 − $10,000 = Add $10,000
Rebalancing strategies:
- Calendar rebalancing — rebalance quarterly or annually regardless of drift
- Threshold rebalancing — rebalance only when any asset drifts beyond ±5% of target (more tax-efficient)
- Band rebalancing — maintain a tolerance band (e.g., stocks must stay within 55–65%)
Tax efficiency tips:
- In taxable accounts, rebalance by directing new contributions to underweight assets rather than selling
- Use tax-advantaged accounts (IRA, 401k) for rebalancing trades to avoid capital gains taxes
- Harvest losses in the overweight assets if they have unrealized losses