Stock Portfolio Rebalance Calculator

Rebalancing restores the target allocation you chose for your risk tolerance and time horizon. When one holding outperforms, the portfolio can drift into a different risk profile. You can rebalance by selling overweight holdings, buying underweight holdings, or directing new contributions toward the shortfalls. The goal is allocation control, not a prediction about which asset will perform best next.

The calculator uses a 5-percentage-point drift threshold as a planning convention, not as an optimal rule for every portfolio. A narrower band restores targets sooner but can create more trades, spreads, and taxable gains. A wider band trades less but permits more allocation drift. Choose a threshold that fits the account type, transaction costs, tax impact, and how closely you need to track the target.

Direct new contributions (paychecks, dividends, RSU sales, year-end bonuses) into whichever holdings are most underweight, instead of selling overweight positions. This calculator's buy-only mode does exactly that: it skips every sell and spreads the new cash across the underweight holdings, proportional to their dollar shortfall. In a 401(k), IRA, or HSA you can rebalance freely with no tax cost. In a taxable brokerage account, buy-only plus an annual review usually keeps drift inside the band without realizing gains.

Calendar rebalancing checks the portfolio on a fixed schedule. Threshold rebalancing acts only after an allocation drifts by a chosen amount. A calendar is simpler to maintain, while a threshold responds to market moves but requires monitoring. A hybrid approach can review on a schedule and trade only when drift exceeds the selected band.

Rebalancing does not guarantee higher returns or a better risk-adjusted result. It restores your target allocation, so its effect depends on which assets outperform, when trades occur, taxes, fees, and the comparison period. A portfolio allowed to drift toward the best-performing asset can earn more while also taking more concentration risk. Judge a rebalancing policy by how well it maintains the risk profile you intended, not by an assumed return bonus.