Question 1

What is portfolio rebalancing and why is it important?

Accepted Answer

Rebalancing involves adjusting your portfolio back to target allocations when market movements cause drift. It helps maintain your desired risk level and can improve returns by selling high and buying low. Our analyzer identifies when and how to rebalance your portfolio.

Question 2

What is asset allocation and how do I choose the right one?

Accepted Answer

Asset allocation is how you divide investments between stocks, bonds, cash, and alternatives. The right allocation depends on your age, risk tolerance, time horizon, and financial goals. A common rule is "100 minus your age" in stocks, but our calculator provides personalized recommendations.

Question 3

How do I know if my portfolio is diversified?

Accepted Answer

A well-diversified portfolio spreads investments across different asset classes, sectors, and geographies. Our analyzer checks sector concentration, asset class diversity, and provides recommendations to improve diversification and reduce risk.

Question 4

What is portfolio drift and when should I rebalance?

Accepted Answer

Portfolio drift occurs when market movements change your actual allocation away from your target. Rebalance when drift exceeds 5-10% or on a regular schedule (quarterly or annually). Our calculator identifies specific rebalancing actions needed.

Question 5

How do I optimize my investment portfolio?

Accepted Answer

Portfolio optimization involves aligning your current allocation with your target, ensuring proper diversification, managing risk, and maximizing tax efficiency. Our analyzer provides specific recommendations for buying/selling to optimize your portfolio.

Investment Portfolio Analyzer

Portfolio Information

Target Allocation

Portfolio Analysis Results