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Rebalancing
Glossary · Portfolio Construction
Definition
Restoring a portfolio to its target allocation by buying or selling assets after prices drift.
If your 60/40 portfolio drifts to 70/30 after a rally, rebalancing sells stocks and buys bonds to return to 60/40.
Terms are defined in the context of how ArthaPilot uses them. For authoritative definitions, consult the SEC, IRS, or a qualified financial advisor.