InsiderFlow › Glossary › What is rebalancing?
Rebalancing means periodically restoring your portfolio to its original weights, selling what has risen and buying what has fallen.
If you start with 60% stocks and 40% bonds and equities rally, a year later you might sit at 70/30: a riskier portfolio than the one you chose. Rebalancing takes you back to 60/40 and automatically sells high to buy low.
You can rebalance by calendar (once a year) or by thresholds (when a weight drifts more than 5%). What matters is doing it by mechanical rules, leaving no room for emotion.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
Not always, but it controls risk and enforces discipline: you sell what's expensive and buy what's discounted.
Once or twice a year is enough: doing it too often generates costs and taxes with no benefit.