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Investing & the Stock Market vocabulary · Portfolio & Risk

Rebalance

Meaning in investing & the stock market, with examples

/ˌriːˈbæləns/verbCommon term

In investing & the stock market, rebalance means: To buy and sell assets in a portfolio so that it returns to the planned mix, for example after shares have risen and now take up too large a part.

In Turkish: yeniden dengelemek, portföyü dengelemek

How it is used

Investors rebalance a portfolio on a schedule, such as once a year, or when weights drift too far from targets. The noun is 'rebalancing'. Index funds also rebalance when an index changes its members, which can cause large trades on that day.

Example sentences

  1. We rebalance the portfolio every January to bring it back to 60/40.

  2. Index rebalancing caused unusually high volume in the final minutes of trading.

Common collocations

  • rebalance a portfolio
  • annual rebalancing
  • index rebalancing
  • rebalance back to target
  • asset allocationThe way an investor divides money between different types of assets, such as shares, bonds, gold and cash, based on goals, time and attitude to risk.
  • portfolioAll the investments that one person or organisation owns, such as shares, bonds, funds and cash, seen together as a whole.
  • index fundA fund that aims to match the performance of a market index by holding the same securities in the same proportions, instead of trying to beat it.
  • diversificationSpreading money across different investments, sectors, countries or asset classes so that a loss in one of them has a smaller effect on the whole portfolio.

More terms: Portfolio & Risk

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This page explains English vocabulary for learners. It is not financial advice.