Portfolio Rebalancing: When, Why, and How to Do It Right
Over time, some investments grow faster than others and your portfolio drifts from its target allocation. Rebalancing restores your intended risk level.
Portfolio rebalancing is the discipline of selling assets that have grown above their target weight and buying those that have fallen below it. Without rebalancing, a portfolio that started as 60% stocks / 30% bonds / 10% crypto can drift to 80% stocks / 15% bonds / 15% crypto after a bull run — making you more exposed than intended.
When to Rebalance
- Calendar rebalancing: fixed schedule (annually for most, quarterly for active investors)
- Threshold rebalancing: when any asset class drifts more than 5–10% from target
- Tax-year end: combine rebalancing with tax-loss harvesting for efficiency
- After major market events: sharp rises or falls often create large drift
How to Rebalance Without Triggering Tax
- Use new contributions to buy underweighted assets — avoids selling and capital gains
- Rebalance inside ISAs and pensions where no CGT applies
- Offset rebalancing sells with tax-loss harvest positions
- In crypto: swap through Steyble at low fees to adjust allocations quickly
Rebalancing Crypto Specifically
Crypto is the most volatile asset class and drifts most dramatically. A 10% Bitcoin allocation can become 30% after a strong bull run. Rebalancing back to target locks in gains systematically. Steyble makes this easy: swap BTC profits into USDC yield or ETH staking directly from your portfolio view.