By Tony Dong, MSc, CETF on February 20, 2026 Estimated reading time: 8 minutes

How often should you rebalance?

By Tony Dong, MSc, CETF on February 20, 2026 Estimated reading time: 8 minutes

In maintaining your planned allocations in a portfolio of ETFs, consistency matters more than precision.

Building your own portfolio can feel like a rite of passage for a do-it-yourself investor. You skip the one-ticket asset allocation exchange-traded fund (ETF) and instead hand-pick a mix of low-cost, broadly diversified equity and bond index ETFs. You size them according to your time horizon and risk tolerance. On day one, everything lines up neatly. 

But markets do not stand still. Over time, some asset classes outperform while others lag. Stocks may surge ahead during a bull market. Bonds may stabilize the portfolio during downturns. As those returns compound at different rates, the asset mix begins to drift from your original allocations. 

An 80% equity portfolio can quietly become 85% or 90% equities after a strong rally. A rough year for stocks can tilt you further into fixed income than you intended. Performance swings, good or bad, can push your portfolio away from the risk profile you originally chose. 

At some point, the mix no longer reflects your original plan. So, should you step in and rebalance?

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You might look to large ETF providers for guidance. The answers are not always clear. The Vanguard Growth ETF Portfolio (VGRO), for example, states that its 80% stock and 20% bond portfolio may be rebalanced at the discretion of the sub-advisor. That leaves plenty of room for interpretation.

Others are more prescriptive. The Hamilton Enhanced Mixed Asset ETF (MIX) uses 1.25x leverage on a 60% S&P 500, 20% Treasury, and 20% gold allocation. Hamilton specifies that it rebalances automatically if weights drift 2% from their targets. That is a tight band and implies frequent turnover.

But you are not running a fund with institutional constraints or leverage targets. You are managing your own portfolio. For most DIY investors, a simpler approach works better. Rather than reacting to every small market move, sticking to a consistent, time-based rebalancing schedule can reduce complexity and prevent decision fatigue. 

In today’s column, we will look at why you should rebalance, how different time-based approaches have historically behaved, and why consistency often matters more than perfect timing.

Why rebalance your portfolio at all?

Rebalancing is the process of selling assets that have grown beyond their target weight and buying those that have fallen below it, such that you restore your portfolio to its intended allocation.

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When you combine assets that are not perfectly correlated and periodically rebalance them back to target weights, you create what is referred to as a........

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