Portfolio Rebalancing Calculator
Calculate exact trades needed to restore target asset allocation from current drift.
About this calculator
The Portfolio Rebalancing Calculator computes exactly how many dollars to buy or sell in each asset class to move a portfolio from its current allocation back to its target allocation. Stock Trade is simply the target stock dollar amount minus the current stock dollar amount (Total Portfolio x Target Stock % minus Total Portfolio x Current Stock %), so a positive figure means buy and a negative figure means sell; Bond Trade and Cash Trade follow the identical logic for their own asset classes, with Cash implicitly filling whatever percentage stocks and bonds don't account for. Because a stock percentage and a bond percentage are entered independently, this calculator caps each bond percentage at whatever share stock hasn't already claimed, so current and target cash percentages can never go negative.
Max Drift reports the single largest gap between any asset class's current and target percentage, and Needs Rebalancing flags 1 whenever that gap reaches the commonly cited 5% threshold many advisors use as a trigger for action rather than rebalancing on every minor market wiggle. Because every trade dollar amount is a percentage gap multiplied by Total Portfolio, a bigger portfolio produces a proportionally bigger Total Trade Volume for the same percentage drift, regardless of whether any individual asset class is being bought or sold — this calculator's default inputs (75% current stock drifting down to a 60% target) produce a sell order for Stock Trade specifically, but the same stock-trade math flips to a buy order whenever current stock sits below target instead, so Stock Trade's direction depends on the current-vs-target configuration, not on Total Portfolio.
Financial Disclaimer
This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs provided. Consult a qualified financial advisor before making investment or financial planning decisions.
Inputs
Results
Stock trade ($)
-$15,000.00
How to Use This Calculator
- Enter your total portfolio value and your current stock and bond percentages.
- Input your target stock and bond allocation percentages based on your investment policy.
- Review Stock Trade and Bond Trade amounts — positive values mean buy, negative means sell.
- Check Needs Rebalancing to see if your current drift exceeds the 5% threshold that typically warrants action.
- Use Total Trade Volume to estimate transaction costs before executing rebalancing trades.
How the result changes with Current stock (%)
| Current stock (%) | Stock trade ($) |
|---|---|
| 38 | $22,000.00 |
| 56 | $4,000.00 |
| 100 | -$40,000.00 |
What each input means
- Total portfolio ($)
- Total portfolio value.
- Current stock (%)
- Current percentage in stocks.
- Target stock (%)
- Target percentage in stocks.
- Current bond (%)
- Current percentage in bonds. Capped so current stock + bond never exceeds 100% -- cash can't go negative.
- Target bond (%)
- Target percentage in bonds. Capped so target stock + bond never exceeds 100% -- cash can't go negative.
What each result means
- Stock trade ($)
- Positive = buy, negative = sell.
- Cash trade ($)
- Positive = add to cash, negative = deploy cash.
- Max drift (%)
- Largest allocation deviation from target.
- Needs rebalancing (0/1)
- 1 = drift exceeds 5% threshold.
- Total trade volume ($)
- Total dollars moved in rebalancing.
How this is calculated
Worked example, using the default values
- Identify Input Parameters5 parametersTotal portfolio ($) = 100000, Current stock (%) = 75, Target stock (%) = 60, Current bond (%) = 15, Target bond (%) = 30 = 5 input(s) provided
- Calculate Stock tradeStock trade-15000 = $-15,000
- Calculate Bond tradeBond trade15000 = $15,000
- Calculate Cash tradeCash trade0 = $0
Engine last updated . Checked against 1 independently-derived test — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
How is Stock Trade calculated?
Stock Trade is the target stock dollar value minus the current stock dollar value: (Total Portfolio x Target Stock %) minus (Total Portfolio x Current Stock %). A positive result means you need to buy that many dollars of stock to reach the target allocation; a negative result means you need to sell that amount instead. Bond Trade uses the same formula applied to the bond percentages.
Why does a bigger portfolio need a bigger dollar trade for the same percentage drift?
Because Stock Trade multiplies the percentage gap between current and target allocation by Total Portfolio in dollars, the same 15-percentage-point drift produces a proportionally larger dollar trade on a $1,000,000 portfolio than on a $100,000 one. The percentage drift itself doesn't change with portfolio size — only the dollar amount needed to close that gap does.
What does the 5% drift threshold for Needs Rebalancing mean?
Needs Rebalancing flags 1 whenever Max Drift — the single largest gap between any asset class's current and target percentage — reaches 5 percentage points or more, a commonly cited threshold many financial advisors use as a trigger for taking action. It's meant to avoid over-trading on every small market fluctuation, rebalancing only when the portfolio has drifted meaningfully from its intended mix.
Why is Cash Trade calculated even though I didn't enter a cash percentage directly?
This calculator treats cash as whatever percentage of the portfolio isn't allocated to stocks or bonds — both currently (100% minus Current Stock % minus Current Bond %) and as a target (100% minus Target Stock % minus Target Bond %). Cash Trade is then the difference between those two implied cash percentages, so it moves automatically whenever your stock and bond percentages don't sum to the same total in the current versus target columns. If your entered stock and bond percentages already add up to 100% or more on their own, this calculator caps the bond percentage at whatever's left after stock, since a portfolio can't hold less than 0% in cash.
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