How to Rebalance Your Portfolio Quarterly

Why Rebalance?

Market movements naturally shift your portfolio allocation over time. Regular rebalancing ensures you maintain your target risk level.

Step-by-Step Guide

Step 1: Review Current Allocation

Start by documenting your current portfolio weights compared to your target allocation.

Step 2: Identify Deviations

Look for positions that have drifted more than 5% from their target weight.

Step 3: Execute Trades

Sell overweight positions and buy underweight ones to realign with targets.

Step 4: Consider Tax Implications

Be mindful of capital gains tax when selling profitable positions.

Best Practices

• Set a schedule (quarterly works well for most investors)
• Use new contributions to rebalance when possible
• Don't over-trade — small deviations are normal

Conclusion

Consistent quarterly rebalancing is one of the most effective yet underutilized strategies for long-term portfolio management.