Investing · General financial education

Rebalancing

When prices move, the weights shift by themselves. Doing nothing is also a change of mix.

In more detail

Rebalancing means: deliberately bringing weights back toward a frame you set yourself. That can mean buys and sells. Each adjustment can trigger costs, spreads and (depending on the jurisdiction) tax. Finmon does not say whether or how often you should do it.

Background

Drift is mechanical: the block that rises more gets more weight. Whether you offset that is a decision about risk, liquidity and effort, not a duty and not a return engine. Tax treatment of sales belongs in the relevant jurisdiction and with tax advice, not in this module.

An example

Your self-chosen frame was half shares, half bonds. After a strong equity year it sits at 60/40, without a trade. The mix changed by inaction. Whether you reset it is open; this is not tax advice.

A common misconception

As long as I do not trade, everything stays as I once set it.

Prices shift weights. Restoring them is optional and can trigger costs or tax, with no advice on whether you should.

Source: Investor.gov · Asset allocation. Last reviewed: 2026-11-09. Editorially reviewed on 2026-11-09. Next review 2027-11-09. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.