Rebalancing

Buying and selling to bring a portfolio's weights back to the ones you chose.

Prices move, so weights drift: a holding that rises grows into a bigger share of the portfolio than you planned. Rebalancing means trading to restore the intended allocation — selling some of what has grown, buying what has shrunk, or directing new deposits to the smaller part.

Every trade can carry costs and, on a sale at a gain, tax; how often to rebalance, if at all, is a choice with trade-offs, not a rule.