FINANCIAL · PORTFOLIO REBALANCING
Portfolio Rebalancing Calculator
Calculate exactly how much to buy or sell in each asset class to rebalance your portfolio to target allocations. Supports up to 25 asset classes.
| Asset | Current | Target | Action |
|---|---|---|---|
| Stocks | $6,000.00 60.00% | $6,000.00 60.00% | — |
| Bonds | $2,500.00 25.00% | $2,500.00 25.00% | — |
| Cash | $1,500.00 15.00% | $1,500.00 15.00% | — |
About This Calculator
Portfolio rebalancing restores your asset allocation to its target after market movements drift it off course. This calculator tells you exactly how much to buy or sell in each asset class — stocks, bonds, cash, real estate, or any other category — to return to your desired allocation. Enter current values and target percentages, and get a clear action plan.
How It Works
Enter each asset class name (optional), current dollar value, and target allocation percentage. Target percentages must sum to 100%. The calculator computes each asset's target dollar value (total portfolio × target%), then determines the difference: positive means buy, negative means sell. Totals for buys and sells are shown alongside the per-asset breakdown.
The Formula
Tradeᵢ = (Total × targetᵢ%) − currentᵢ
- Total
- total portfolio value (sum of all current values)
- targetᵢ%
- target allocation percentage for asset i (must sum to 100%)
- currentᵢ
- current dollar value of asset i
- Tradeᵢ
- amount to buy (positive) or sell (negative) for asset i
Frequently Asked Questions
- How often should I rebalance my portfolio?
- Common approaches include calendar rebalancing (annually or quarterly) and threshold rebalancing (whenever any asset drifts more than 5% from its target). Research suggests that annual or threshold-based rebalancing strikes the best balance between maintaining your risk target and minimizing transaction costs and tax events.
- Does rebalancing hurt returns?
- Rebalancing itself does not inherently reduce long-term returns and can slightly improve risk-adjusted returns by systematically selling high-performing assets and buying underperformers. However, transaction costs and taxes on realized gains can erode those benefits. Tax-advantaged accounts (401k, IRA) are ideal for rebalancing because trades are not taxable.
- What if my target allocations do not sum to 100%?
- The allocations must sum to exactly 100% (the calculator allows ±0.1% for rounding). If they do not, the result would be mathematically undefined — the target dollar amounts would not sum to the portfolio total. Adjust your targets until they sum to 100% before calculating.
- Does this assume I add new cash to rebalance?
- No — this calculator performs a pure rebalancing using only existing holdings. If you want to rebalance by directing new contributions toward underweight assets (a common tax-efficient approach), adjust your current values to include the new cash before entering them.