Rebalancing is how you return a drifted portfolio to its target weights. After a trend or momentum move, some positions grow and others shrink. This calculator tells you the exact dollar amount to buy or sell in each to get back on target. Enter your positions below.
How rebalancing fits a trend system
Most trend systems rebalance on a schedule, usually monthly. The weights drift between reviews as winners grow and losers shrink. Rebalancing forces you to trim winners and add to laggards, which is uncomfortable but is exactly what keeps the portfolio's risk at the level you chose. Use the target weights you wrote down when you designed the system, and the review becomes mechanical.
FAQ
How often should I rebalance an ETF portfolio?
Monthly is the common default for trend systems. Weekly rebalancing trades more and raises costs; quarterly reacts more slowly. The right cadence is the one you can follow mechanically.
Why do target weights drift?
Weights drift because positions grow at different rates. A winning ETF becomes a larger share of the portfolio, and a losing one becomes smaller. Rebalancing returns them to the proportions you originally chose.
Do target weights need to add up to 100%?
Yes. If your target weights do not sum to 100%, the portfolio is not fully allocated and the calculator will flag it.
Disclaimer: Educational tool only, not financial advice. It performs arithmetic on your inputs; it does not recommend any trade, position, or strategy. Full disclaimer and affiliate disclosure.
Leave a Reply