rebalancing


Definition
Making adjustments to counteract the fact that different assets have performed differently and now comprise different percentages of the portfolio than they were intended to. For example, a portfolio with a high growth objective holding 20 percent of its assets in money market securities should consider rebalancing to hold fewer assets in money market securities and more assets in stocks or other higher risk instruments.


Related Terms

constant ratio plan -  More

asset allocation -  More

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