Portfolio Rebalancing: How to Keep Your Investments on Track

When you buy stocks, bonds, or ETFs, you set a target for how much of your money goes into each portfolio rebalancing, the process of adjusting your investments to maintain your original asset mix. Also known as portfolio adjustment, it’s not about chasing gains—it’s about staying in control. Over time, some assets grow faster than others. If you started with 60% stocks and 40% bonds, a strong stock market might push that to 75% stocks and 25% bonds. That’s not your plan anymore. It’s riskier. Rebalancing brings you back.

Think of it like steering a car. You don’t just set the wheel and forget it—you make small corrections. Asset allocation, how you divide your money between different types of investments is your roadmap. Risk tolerance, how much market ups and downs you can handle without panicking tells you what that roadmap should look like. If you’re saving for retirement in 20 years, you might tolerate more risk. If you need the money in two years, you don’t. Rebalancing makes sure your portfolio matches your life, not just the market’s mood.

Most people wait too long—or never do it at all. Some rebalance once a year. Others do it when their allocations drift by 5% or more. You don’t need fancy tools. Most brokerages let you click a button to sell high and buy low automatically. But you still need to decide: what’s your target? And why? The posts below show real examples: how to use portfolio diversification, spreading your money across different assets to reduce risk across time horizons, how to avoid emotional mistakes during market swings, and how even small adjustments can make a big difference over time. You’ll see how advisors use portfolio rebalancing to lock in gains, reduce stress, and keep clients on track—even when the news is scary. No jargon. No fluff. Just what works.