Portfolio Rebalancing Calculator
See exactly how much to buy or sell of each asset to restore your target allocation.
How this is calculated
The total portfolio value (plus any new cash you're deploying) is multiplied by each asset's target percentage to get its target dollar value. The trade amount for each asset is simply its target value minus its current value — positive means buy, negative means sell.
Drift is the difference between an asset's current percentage of the portfolio and its target percentage. Assets whose drift exceeds your chosen threshold are flagged as needing attention — a common approach is to only rebalance when drift crosses a meaningful threshold (e.g. 5 percentage points), rather than making small trades on every minor market move.
Frequently asked questions
- What is portfolio rebalancing?
- Buying or selling assets to bring your portfolio back to its target allocation after market movements have caused it to drift — for example, if stocks outperform bonds, your stock allocation grows beyond its target without you doing anything.
- How often should I rebalance?
- Common approaches are calendar-based (e.g. once a year or once a quarter) or threshold-based (rebalance whenever any asset drifts more than a set percentage, e.g. 5%). Threshold-based rebalancing reacts to actual market moves rather than an arbitrary date.
- Threshold-based vs calendar-based rebalancing — which is better?
- Threshold-based rebalancing tends to trade less often in calm markets and more often in volatile ones, which can reduce unnecessary transaction costs. Calendar-based rebalancing is simpler and more predictable but may trade in small, unnecessary amounts or miss significant drift between review dates.
- What are the tax implications of selling to rebalance?
- Selling appreciated assets in a taxable account triggers capital gains tax. In tax-advantaged accounts (401(k), IRA), rebalancing has no immediate tax consequence, which is why many investors prefer to do most of their rebalancing there when possible.
- Can I rebalance using new contributions instead of selling?
- Yes — directing new contributions toward whichever asset is currently underweight is a tax-efficient way to rebalance gradually without triggering capital gains, though it works more slowly than selling and may not fully correct large drifts on its own.
- Does asset allocation matter more than security selection long-term?
- Research on portfolio returns has generally found that asset allocation — the mix of stocks, bonds, and other asset classes — explains the large majority of variation in long-term portfolio returns, more than the specific securities chosen within each asset class.
- What assets should I include in a rebalancing plan?
- Any distinct asset classes you hold and want to maintain target weights for — commonly domestic stocks, international stocks, bonds, and cash, but you can add more granular categories (e.g. small-cap, real estate, commodities) if your strategy calls for them.
- Can I use this in my own app?
- Yes — every calculator on Stupidly Clever has a matching REST API and MCP tool that runs the same underlying logic.