P

Glossary · PSX term

Portfolio rebalancing.

Rebalancing is realigning your portfolio back to its target mix after prices drift it off course.

Definition

When some holdings grow faster than others, your allocation shifts, and rebalancing sells winners and adds to laggards to restore the plan. It enforces discipline but can trigger trading costs and taxes.

Worked example

If stocks rise and become 70% of a 60% target, you might sell some to bring the mix back to 60%.

Related on PSX Clarity

Asset allocation

Diversification

Capital gain tax

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