Rebalancing, drift, and keeping your risk in check
When you set a target allocation — say 50% US stocks, 25% international, 25% bonds — you are choosing how much risk to take. Markets then pull that mix apart: the fastest-growing holding swells beyond its target and quietly raises your risk. Rebalancing restores the mix you chose. This tool shows your current weights, the drift in each holding, and the precise trades to fix it.
How the trades are found
targetValue = total × target% · trade = targetValue − currentValue
A positive trade is a buy, a negative one a sell. In contributions-only mode we never sell: new money is sent first to the most underweight holdings (in proportion to their shortfall), then any leftover is spread by target weight.
What makes this calculator different
- Exact buy/sell amounts. Not just "you’re overweight stocks" — the precise dollar trade for every holding to hit your target.
- Tax-friendly contributions-only mode. Most online rebalancers only tell you to sell and buy. We also show how to rebalance with new money alone, avoiding taxable sales — the approach most tools ignore.
- Per-holding drift. See which positions have wandered furthest from target, and by how much, at a glance.
- Any number of assets. Add or remove holdings, and share your setup with a link.
Frequently asked questions
What is portfolio rebalancing?+
Rebalancing is the act of bringing your holdings back to their target allocation. Over time, the assets that grow fastest take up a larger share of your portfolio, which quietly raises your risk above what you intended. Rebalancing trims the holdings that have grown beyond their target and tops up the ones that have lagged, restoring the mix you originally chose. This calculator shows the exact buy and sell amounts to get there.
Why and when should I rebalance?+
The point of rebalancing is risk control, not chasing returns: it keeps your stock/bond split — and therefore your exposure to a market drop — in line with your plan. It also enforces a disciplined "sell high, buy low" by trimming winners and adding to laggards. Most investors rebalance on a fixed schedule (e.g. once a year), when an asset drifts past a set threshold, or whenever they add new money. There is no single right answer; consistency matters more than the exact rule.
Threshold rebalancing vs calendar rebalancing — which is better?+
Calendar rebalancing checks your portfolio on a fixed cadence (annually or quarterly) regardless of how far it has drifted — simple and easy to stick to. Threshold (or band) rebalancing only acts when an asset moves more than a set amount from its target, say ±5 percentage points, which means you trade only when it actually matters. Many investors combine the two: check on a schedule, but only trade if drift exceeds the band. Both work; the best one is the one you will actually follow.
How can I rebalance without paying capital gains tax?+
In a taxable account, selling an appreciated holding realizes a capital gain you may owe tax on. You can often avoid that by rebalancing with contributions only: direct new money — paycheck deferrals, dividends, fresh cash — into your underweight holdings instead of selling the overweight ones. It nudges your allocation back toward target without triggering a single sale. This calculator’s "contributions only" mode does exactly that, while the full-rebalance mode shows the sell-and-buy version for tax-advantaged accounts where gains don’t matter.
What is allocation drift?+
Drift is the gap between an asset’s current share of your portfolio and its target share. If your target for stocks is 50% but a strong run has pushed them to 60%, that holding has +10 points of drift — you are carrying more risk than planned. Tracking drift per holding tells you which positions are pulling your portfolio off course and by how much, so you know where to focus when you rebalance.
Disclaimer: This calculator is for educational purposes only. It does not account for trading costs, bid/ask spreads, wash-sale rules, or your specific tax situation, and target allocations are a personal decision. It is not investment or tax advice.