Rebalancing

Knowledge Center

• About
• Home
• Dictionary
• Encyclopedia
• Question?
• Views

• Register
• Log in
• Help

• Change & Organization
• Communication & Skills
• Decision-making & Valuation
• Ethics & Responsibility
• Finance & Investing
• HRM
• Knowledge & Intangibles
• Leadership
• Marketing
• Program & Project
• Strategy
• Supply Chain & Quality

Description of Rebalancing. Explanation.

Definition Rebalancing. Description.

Rebalancing is the investing process of realigning the weightings of a portfolio of assets to a target asset portfolio composition. Under-weighted securities can be bought and added with cash; alternatively, over-weighted securities can be sold and decreased to purchase under-weighted securities.

Institutional investors often have a long-term investment strategy which is based on holding a certain mix of stocks, bonds, options, futures, other investments and cash. Suppose that due to a price increase of the bonds, its size in the total portfolio increase. This would then require to rebalance the portfolio in order to restore the equilibrium.

The time interval for a rebalance could be anything between a year for private investors to quarterly or even daily for large institutional investors. Alternatively it can occur when the portfolio is more than a certain percentage off target. A simple way to decrease the need for rebalancing is by using index funds or mutual funds.

Rebalancing Forum   Quotes on Rebalancing. Quotations Hi, do you know of a remarkable, humorous quote by...         Begin a new topic

Rebalancing Special Interest Group Special Interest Group

Best Practices - Rebalancing Premium

Expert Tips - Rebalancing Premium

Resources - Rebalancing Premium   News about Rebalancing         Videos about Rebalancing         Presentations about Rebalancing         More about Rebalancing

Compare with: Capital Asset Pricing Model  |  Asset Management

Return to Management Hub: Finance & Investing

More on Management  |  Return to Management Dictionary  | 

This ends our Rebalancing summary and forum.