Portfolio Rebalancing Calculator
Analyze your portfolio allocation and determine when to rebalance
Portfolio Details
Asset Allocation
Rebalance when allocation deviates by this amount
Share of each dollar sold that is profit. Example: bought at $60,000, now worth $78,000 → 23%.
Rebalancing Recommended
At least one asset is more than 5 points from its target. Bringing every asset back to target takes 4 trades.
Portfolio Overview
Current vs Target Allocation
| Asset Class | Current Value | Current % | Target % | Deviation | Action |
|---|---|---|---|---|---|
| US Stocks | $50,000 | 53.8% | 60.0% | -6.2% | Buy $5,800 |
| International Stocks | $20,000 | 21.5% | 20.0% | +1.5% | Sell $1,400 |
| Bonds | $15,000 | 16.1% | 15.0% | +1.1% | Sell $1,050 |
| REITs | $8,000 | 8.6% | 5.0% | +3.6% | Sell $3,350 |
Rebalancing Recommendation
When to Check Again
Vanguard's research on a 60/40 portfolio found that checking once or twice a year and rebalancing at a 5-point threshold balances risk control and cost. How often to rebalance
Cost Analysis
Tax = amount sold × gain share × tax rate. Rough estimate; selling inside a tax-advantaged account avoids it.
Portfolio Allocation Visualization
The dark line represents your target allocation. Yellow bars indicate assets that need rebalancing.
Portfolio Rebalancing Best Practices
When to Rebalance
- • When allocations drift beyond your threshold (typically 5-10%)
- • During major life events or goal changes
- • At regular intervals (quarterly or annually)
- • When adding new money to your portfolio
Cost Considerations
- • Transaction fees and bid-ask spreads
- • Tax implications in taxable accounts
- • Time and effort required
- • Market timing risks
Rebalancing Methods
- • Calendar-based: Set schedule (quarterly/annually)
- • Threshold-based: When deviations reach certain levels
- • Hybrid: Combination of both methods
- • Cash flow: Use new contributions to rebalance
Tax-Efficient Strategies
- • Prioritize rebalancing in tax-advantaged accounts
- • Use new contributions to restore balance
- • Harvest tax losses when selling in taxable accounts
- • Consider asset location optimization
💡 Pro Tip
Use a higher threshold (7-10%) for taxable accounts to minimize tax implications, and a lower threshold (3-5%) for tax-advantaged accounts.
📈 Smart Strategy
When making new contributions, direct them to underweight asset classes to naturally rebalance without selling existing positions.