What is Portfolio Rebalancing?

Portfolio rebalancing is the process of realigning the weightings of your investment portfolio to maintain your desired asset allocation. As market conditions change, the value of different assets in your portfolio will fluctuate, causing your portfolio to drift from its original target allocation.

Why Rebalance Your Portfolio?

• Risk Management: Prevents overexposure to any single asset class
• Disciplined Investing: Forces you to buy low and sell high
• Return Optimization: Maintains your optimal risk-return profile
• Emotional Control: Removes emotion from investment decisions

When to Rebalance?

• Threshold-based: When allocation deviates by 5-15% from target
• Time-based: Quarterly, semi-annually, or annually
• Event-based: After major market movements or life changes

Indian Market Considerations

• Tax Implications: Consider LTCG and STCG tax rates
• Exit Load: Check mutual fund exit loads before selling
• Transaction Costs: Factor in brokerage and other charges
• Market Timing: Consider market volatility in Indian markets

How to Use This Calculator

• Enter Portfolio Value: Input your total investment amount in Indian Rupees
• Set Threshold: Choose your rebalancing threshold (5% conservative, 10% moderate, 15% aggressive)
• Asset Allocation: Enter your target and current percentages for each asset class
• Get Recommendations: The calculator will show you exactly how much to buy or sell

Disclaimer: This calculator is for educational purposes only. Please consult with a qualified financial advisor before making investment decisions. Past performance does not guarantee future results.