Portfolio Rebalancing Calculator

Read the calculator result

This calculator answers a practical question: given the investments you already hold, the target percentages you have chosen, and any new cash, how much would move into or out of each bucket? It compares a full rebalance that permits sales with a deposit-only approach that avoids selling. The result is a dollar allocation worksheet, not a recommendation about which investments or target weights are appropriate.

The three buckets can represent categories that make sense for your own plan. Keep their definitions consistent. If bucket A includes several funds, add their balances before entering the total. Don’t enter one holding in two buckets or count money awaiting investment as both a current balance and new cash.

The SEC’s Investor.gov glossary describes rebalancing as returning a portfolio to its intended allocation after holdings have moved out of alignment. The target itself remains a separate decision. A calculator can translate a 50% target into dollars; it can’t establish that 50% suits your financial goals or ability to absorb losses.

Portfolio rebalancing: prepare a consistent portfolio snapshot

Enter all three current balances using values from the same practical snapshot. If one balance reflects yesterday’s closing value and another includes a large transaction from today, the starting percentages may describe a portfolio that never actually existed. Update the worksheet after important deposits, withdrawals, or completed trades.

The target percentages must add to 100%. They describe the entire portfolio included in this calculation. A target of zero is allowed, meaning that a full rebalance would remove that bucket’s allocation within the modeled portfolio. It doesn’t mean the calculator has concluded that the investment should be sold.

New cash is money that will enter the three-bucket allocation after the starting snapshot. The tool includes that cash before calculating target dollars. This matters because a deposit changes the denominator: a holding can become a smaller percentage without its dollar value falling.

For example, a $60,000 bucket is 60% of a $100,000 portfolio. If $10,000 arrives and is invested elsewhere, that unchanged bucket becomes about 54.55% of $110,000. Calling the original 60% its final weight would overstate the remaining imbalance.

How the calculator works

First, the calculator adds the current balances and the new cash. For each bucket, target dollars = total portfolio after cash × target percentage. It then calculates planned trade = target dollars − current balance.

A positive trade is a purchase; a negative trade is a sale. Total purchases can exceed the new deposit because sale proceeds help fund purchases. The difference between total purchases and total sales equals the cash being added. This reconciliation prevents a plan from appearing to purchase more than its combined cash and sale proceeds support.

The full-rebalance result reaches the target weights before fees, taxes, price movement, and share rounding. It allows dollar amounts without checking whether a particular security supports fractional shares. Treat it as a target for execution planning, then reconcile actual orders and remaining cash separately.

Portfolio rebalancing calculator example: add $10,000 to a $100,000 portfolio

The illustrative starting balances are $60,000 in A, $25,000 in B, and $15,000 in C. Their targets are 50%, 30%, and 20%. Adding $10,000 creates a $110,000 total for calculating target dollars.

The plan contains $15,000 of purchases and $5,000 of sales. The sale isn’t an additional contribution: it converts part of A into resources for B and C. After those trades, the bucket balances are $55,000, $33,000, and $22,000, so the largest remaining target-weight deviation is zero before excluded costs.

With no new cash, the same targets would instead require selling $10,000 of A and buying $5,000 each of B and C. The deposit reduces the sale needed in the default example because it enlarges the portfolio against which the target percentages are measured.

Allocate new cash without selling

Cash-only mode follows a specific rule: find each positive dollar shortfall against the targets for the portfolio after the deposit, then distribute the new cash in proportion to those shortfalls. Buckets already above target receive no deposit. The method does not sell an overweight holding or promise that the targets will be reached.

In the default example, the positive shortfalls are zero for A, $8,000 for B, and $7,000 for C. Their total is $15,000, but only $10,000 is available. B therefore receives $10,000 × 8/15, or about $5,333.33. C receives $10,000 × 7/15, or about $4,666.67.

The resulting balances are $60,000, approximately $30,333.33, and approximately $19,666.67. Their weights are about 54.55%, 27.58%, and 17.88%. A remains 4.55 percentage points above its 50% target. The portfolio rebalancing calculator reports that residual difference instead of describing a deposit-only plan as a completed full rebalance.

Displayed cents and percentages are rounded; allocation calculations retain additional precision. If you place orders in rounded dollar amounts or whole shares, a few cents of cash or a small weight difference may remain. Check the executed totals rather than assuming the displayed rounded rows create exact orders automatically.

When new cash can reach all the targets

A larger deposit can eliminate the need for a sale. With the same starting balances and targets, add $20,000 instead of $10,000. The new total is $120,000, making target dollars $60,000, $36,000, and $24,000. A already equals its target, while B needs $11,000 and C needs $9,000.

Those two shortfalls add to the $20,000 deposit. Both methods therefore produce the same final allocation without a sale in this scenario. The equality follows from the particular numbers; it is not a general promise that any deposit will remove an overweight position.

You can derive the amount needed to dilute A to its target by dividing its unchanged balance by the target fraction: $60,000 ÷ 0.50 = $120,000 of total portfolio value. Subtracting the current $100,000 leaves $20,000. Other buckets still need checking, especially when several are overweight or when a target is zero.

Read the chart and review the trade list

The chart pairs target dollars with final dollars for each bucket. Under a full rebalance, each pair matches. In cash-only mode, differences between the bars reveal targets the deposit hasn’t reached. The table adds current weights, signed trades, and final weights so the bars can be traced to the entered balances.

The largest deviation is measured in percentage points, not as a percentage of the target. A final 54.55% weight against a 50% target differs by 4.55 percentage points. It doesn’t mean the dollar holding is only 4.55% above its target dollar amount.

Compare both modes before changing the target percentages. Switching the method answers how cash is allocated under the same objective; changing the targets changes the objective itself. Keeping those experiments separate makes the effect of each decision easier to understand.

Check the plan before entering orders

Read the signed trade column before looking at the purchase total. In the default full-rebalance example, a $15,000 purchase total doesn’t mean that a $15,000 deposit is required. It’s supported by the $10,000 deposit plus the proposed $5,000 sale. If that sale can’t occur, switch to cash-only mode and review the resulting allocation instead of using an unfunded purchase list.

Choose one consistent treatment for idle cash. If a bucket intentionally represents cash holdings, include that balance in its current value and assign its target weight. Money entered separately as new cash is distributed according to the selected method, so it doesn’t automatically remain uninvested. A household emergency fund that’s outside this portfolio shouldn’t be included merely to improve the percentages.

After execution, replace the planned values with the actual balances and any remaining available deposit. Running the worksheet again checks what remains to be done; it shouldn’t reuse the original deposit as though the same dollars were arriving twice.

Costs and account details to review separately

The SEC’s asset-allocation guide identifies sales, purchases, and redirected contributions as ways to rebalance, and notes that transaction costs and tax consequences deserve review. This tool calculates none of those execution effects. A proposed sale amount doesn’t identify which tax lot to sell or its after-tax proceeds.

If the buckets span multiple accounts, confirm where the cash can actually move and where trades can occur. The worksheet treats the entered dollars as one pool. It doesn’t enforce account restrictions, settlement timing, minimum trade sizes, or an account’s permitted investments.

For a separate view of recurring percentage charges, use the investment fee impact calculator. For the broader balance sheet, use the net worth calculator. Rebalancing changes the composition of an entered portfolio; it doesn’t itself create additional assets in either analysis.

Portfolio rebalancing calculator questions

Can I start with no investments?

Yes, if you enter positive new cash. With a zero starting portfolio and a $10,000 deposit, the example targets allocate $5,000, $3,000, and $2,000. Current weights are undefined because the initial denominator is zero, while final weights are meaningful.

What happens in cash-only mode with no new cash?

No trades occur. The calculator leaves current balances intact and shows the remaining deviations. A zero deposit can’t correct weights by itself when sales are prohibited.

Does the smallest deviation identify the best plan?

It identifies the closest match to your stated targets under this arithmetic. The calculator hasn’t weighed taxes, liquidity, suitability, risk, or transaction costs. Review those considerations before translating a calculated trade list into actual orders.