Portfolio Rebalancing

Selling high and buying low: The systematic way to manage asset drift.

Discipline over Emotion

Rebalancing is the process of bringing your portfolio back to its target weights. If stocks grow 20% while bonds stay flat, your 60/40 portfolio becomes 70/30. You are now taking more risk than you intended. Rebalancing forces you to sell winners and buy underperformers.

Why Rebalance?

Without rebalancing, your portfolio will eventually drift into a high-risk allocation. A classic 60/40 portfolio left alone for 30 years could end up as 90/10, leaving you dangerously exposed right before retirement. Systematic rebalancing captures gains and maintains your risk profile.

Periodic Rebalancing

Rebalancing on a set schedule (e.g., quarterly or annually) regardless of market conditions. Simple and effective for most investors.

Threshold Rebalancing

Only rebalancing when an asset class drifts by a certain percentage (e.g., +/- 5%) from its target. More efficient for volatile markets.

The "Rebalance Bonus"

In many scenarios, rebalancing actually increases your long-term returns by capturing "volatility harvesting." StressTest.pro allows you to test different rebalancing frequencies (None, Monthly, Quarterly, Annually) in any backtest to see the exact impact on your CAGR and Max Drawdown.

Automate your Rebalancing

Pro Feature: Watch Dog Alerts

Don't check your accounts every day. Our Watch Dog feature monitors your drift and alerts you the second your portfolio needs a human eye.

Activate Watch Dog