How do I rebalance my portfolio?

InvestingWarren TeamPublished April 25, 2026

Quick answer

Pick a target allocation (e.g., 80% stocks, 20% bonds). Once or twice a year, sell what's above its target and buy what's below. In tax-advantaged accounts this is friction-free; in taxable, use new contributions to rebalance and avoid taxes.

Portfolio rebalancing example: stock allocation drifted from 80% to 87%, then restored.

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