Portfolio and Allocation Terms
Rebalancing
Adjusting a portfolio back toward its target mix of investments.
Also called: portfolio rebalancing
What it means
Rebalancing means changing holdings in a portfolio so the asset mix returns to a chosen target, such as 60 percent stocks and 40 percent bonds. This may involve selling some investments and buying others after markets move.
Why it matters
It helps control risk drift over time instead of letting one part of the portfolio quietly dominate.