Generic education; UK publication perimeter · Illustrative example
Understand the arithmetic of rebalancing
Compare current holdings with a target chosen independently.
Money in
Current: A £60k / B £25k / C £15k
Money out
Supplied target: A £50k / B £30k / C £20k
£100,000 portfolio before costs and tax
- A: £60k − £50k = £10k above the supplied target
- B: £30k − £25k = £5k below the supplied target
- C: £20k − £15k = £5k below the supplied target
Hypothetical neutral buckets A/B/C; target 50%/30%/20% supplied independently. No security, asset class, allocation or trade is recommended; tax and fees excluded from arithmetic.
This is arithmetic, not a trade recommendation. Costs, tax and suitability may make rebalancing inappropriate.
Steps
- Supply existing target
- Measure current drift
- Assess costs and tax
- Seek advice if needed
Documents
- Existing allocation policy
- Current holding values
- Cost and tax assumptions
My brief
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