Rebalancing Portfolio – Practical Demo

📊 Rebalancing Your Portfolio

Maintain your target asset allocation by reviewing your portfolio annually.

🔁 What is Rebalancing?

Rebalancing means adjusting your investments to maintain your original asset allocation—like 60% equity and 40% debt—especially after market movements skew the ratios.

📅 Annual Check-Up Method (Example)

Original plan: 60% Equity, 40% Debt
Let’s assume ₹1,00,000 invested in Jan 2024

Asset	Initial (₹)	% Allocation	Value After 1 Year (₹)	New % Allocation	Action Needed
Equity	60,000	60%	72,000	66%	Sell ₹6,000
Debt	40,000	40%	42,000	34%	Buy ₹6,000

Note: Equity overperformed, so sell excess and move into debt to bring portfolio back to 60:40.

✅ Steps to Rebalance Your Portfolio

1. Check current values of all investments annually
2. Calculate current % allocation of each asset class
3. Compare with your target allocation (e.g., 60:40)
4. Sell/buy units to bring it back to the target

💡 Pro Tip: Rebalancing helps you "buy low, sell high" in a disciplined way!