How To Rebalance Portfolio?

Here are the basic steps to rebalance your investment portfolio:

1. Review your target asset allocation.
2. Compare your current asset allocation to your targets.
3. Sell positions that are overweighted to raise cash.
4. Use the cash to buy positions that are underweighted.
5. Reinvest dividends and capital gains into underweighted assets.
6. Repeat periodically, such as annually, to maintain your targets.

Rebalancing ensures you don't take on more risk than intended as some assets outperform others. It also locks in gains from positions that have grown larger than their targets. Regular rebalancing keeps your portfolio on track to meet your long-term investment goals.

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Related tutorial videos:

How To Rebalance Your Portfolio

Jack Bogle: "Never" Rebalance Your Investment Portfolio (and how to do it if you must)