Finance category
Mortgage, loan, investing, tax, and money calculators.
Rebalancing Trigger Calculator
Drift from target triggers rebalancing for discipline.
Rebalance amount
$0
Current drift
0.05%
Trigger decision
Hold
How the math works
Drift = current − target. If |drift| > tolerance, rebalance. Amount = drift × portfolio value.
35% vs 30% = +5% drift. Tolerance 5% = on the edge. Rebalance $25M to restore target.
How to Use
- Enter current allocation %.
- Enter target allocation %.
- Enter drift tolerance %.
- Enter portfolio value.
- Read rebalancing decision.
Frequently Asked Questions
Trigger bands?
Tight: ±2-3% triggers rebalance. Moderate: ±5% (most common). Loose: ±10%. Tight bands force frequent trading (costly). Loose bands allow drift but reduce transaction cost. Match band to liquidity and transaction costs.
Rebalancing mechanics?
Dispose of over-weighted asset class. Acquire under-weighted. Real estate: 6-18 month transaction cycle makes rapid rebalancing impractical. Most institutional operators rebalance quarterly-to-annually with strategic rather than tactical moves.
Market timing vs discipline?
Discipline wins long-term. Selling outperforming assets to buy underperforming feels wrong but produces better results. Don't abandon discipline mid-cycle. Document rebalancing policy in investment charter; follow it mechanically.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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