How often should I consider rebalancing my asset allocation?
Published 17 September 2026
The last 2 years have gotten no returns from markets and missed the rallies in Gold and Silver.
I think I should be more actively looking at my portfolio and changing asset allocation, how often should I review it?
I am hesitant to make changes due to capital gains tax.
I think I should be more actively looking at my portfolio and changing asset allocation, how often should I review it?
I am hesitant to make changes due to capital gains tax.
Review your portfolio periodically and “through a pre-defined system”.
Rebalance it only with a strong documented reason.
Rule 1. Do not confuse reviewing with changing.
The biggest mistake would be to change your asset allocation because Gold and Silver performed well while your existing investments disappointed. That is not rebalancing. That is performance chasing.
Rule 2. Consider rebalancing only if:
Your goals, time horizon or risk capacity change, or An asset class moves materially outside its “predetermined allocation range”, or The original investment hypothesis is violated.
Rule 3. Capital-gains tax is a cost, but it should not dictate your portfolio.
First use fresh investments, SIPs, dividends and maturing investments to add to underweight asset classes. Sell and incur tax only when cash flows cannot adequately correct the allocation.
Rule 4. A diversified portfolio will always contain something that is underperforming. That is not a defect. That is diversification doing its job.
Rebalancing should feel boring. If you are changing allocations frequently based on recent returns, you are not rebalancing. You are trading.
Rebalance it only with a strong documented reason.
Rule 1. Do not confuse reviewing with changing.
The biggest mistake would be to change your asset allocation because Gold and Silver performed well while your existing investments disappointed. That is not rebalancing. That is performance chasing.
Rule 2. Consider rebalancing only if:
Your goals, time horizon or risk capacity change, or An asset class moves materially outside its “predetermined allocation range”, or The original investment hypothesis is violated.
Rule 3. Capital-gains tax is a cost, but it should not dictate your portfolio.
First use fresh investments, SIPs, dividends and maturing investments to add to underweight asset classes. Sell and incur tax only when cash flows cannot adequately correct the allocation.
Rule 4. A diversified portfolio will always contain something that is underperforming. That is not a defect. That is diversification doing its job.
Rebalancing should feel boring. If you are changing allocations frequently based on recent returns, you are not rebalancing. You are trading.