Putting your asset mix back to the weights you chose
Rebalancing restores your chosen weights after price moves have shifted them. It means selling what has risen and buying what has fallen, which trims high and adds low. Doing it often piles up commissions and tax, so once a year, or when the mix drifts past a set threshold, is the usual practice.
If a 50/50 split of stocks and bonds drifts to 60/40, you trade back to the original weights.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.