Rebalancing
Risk & psychologyRestoring a portfolio to target weights on a schedule.
In plain terms
Sells strength and buys weakness automatically, without requiring you to predict anything.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 4 terms
Read the full lesson →
Rebalancing band
Risk & psychologyA tolerance around a target allocation, breached only when a sleeve drifts beyond it.
In plain terms
What turns "stay mostly in equity" into a rule you can check in ten seconds.
Index rebalancing
Technical analysisPeriodic revision of index constituents and weights, forcing index funds to trade.
In plain terms
Mechanical buying and selling on a known date by participants who have no choice.
Commitment device
Risk & psychologyAn arrangement made in advance that constrains your later self.
In plain terms
An auto-debit SIP and a fixed rebalancing date need no willpower, which is why they survive decades.