Portfolio Rebalancing Calculator
Portfolio rebalancing restores your target asset allocation after market movements have caused your holdings to drift. For example, if stocks outperform bonds over the year, your portfolio might shift from 60% stocks / 40% bonds to 70% stocks / 30% bonds. Rebalancing means selling some stocks and buying bonds to return to 60/40. Enter your current asset values and target percentages (must total 100%) to see the exact dollar amounts you need to buy or sell in each asset class.
Enter values above to see rebalancing trades.
Rebalancing formula
Total portfolio = sum of all asset values
Target value for asset i = Total * (Target % / 100)
Trade amount = Target value - Current value
Positive = buy, Negative = sell
For each asset class, the difference between its target dollar value and its current dollar value tells you the trade needed. Positive means buy more; negative means sell that amount.
Rebalancing strategies
- Calendar rebalancing: rebalance on a fixed schedule (annually or semi-annually) regardless of drift.
- Threshold rebalancing: rebalance only when an asset drifts more than 5% from its target.
- New contribution rebalancing: direct new money into underweight assets to rebalance without selling.
- Tax-loss harvesting: sell underperforming assets at a loss to offset gains elsewhere, then rebalance.
- In tax-advantaged accounts (IRA, 401k), rebalance freely without immediate tax consequences.
Portfolio rebalancing: frequently asked questions
What is portfolio rebalancing?
Portfolio rebalancing is the process of buying or selling assets in your portfolio to restore your target asset allocation. Over time, different assets grow at different rates, causing your portfolio to drift from its intended mix.
How often should I rebalance?
Most financial planners recommend rebalancing once or twice per year, or whenever any asset class drifts more than 5 percentage points from its target. Calendar-based rebalancing (annually) and threshold-based rebalancing (5% drift) are both widely used approaches.
Does rebalancing have tax consequences?
Yes. Selling appreciated assets in a taxable account triggers capital gains taxes. In tax-advantaged accounts (401k, IRA), you can rebalance without immediate tax consequences. Consider directing new contributions to underweight assets as a tax-efficient rebalancing strategy.
What if I have three or more asset classes?
This calculator supports up to four asset classes. For more complex portfolios, the principle is the same: calculate the current percentage of each asset, compare it to the target, and determine the trade required to bring each asset back to its target weight.
Should I rebalance during a market downturn?
Rebalancing during downturns can actually be beneficial: you buy more of the assets that have fallen in price (buy low) and sell assets that have held their value. This disciplined approach is one of the ways rebalancing can add long-term value.
Official sources
- U.S. Securities and Exchange Commission: Rebalancing Your Portfolio.
- FINRA: Rebalancing Your Portfolio.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.