Rebalance Without Selling? The Contribution Calculation

Episode notes and examples

Try the FREE Rebalancing contribution calculator — Download your scenario as a CSV. https://fiscalnonsense.com/calculators/rebalance-contributions/

Ben holds $6,000 in stocks and $4,000 in bonds. Returning to his fictional 50/50 target takes either selling and reinvesting $1,000, or adding $2,000 to bonds. Adding only $1,000 leaves stocks at 54.5%; adding $500 leaves 57.1%. The total changes when new money arrives. Which constraint would you check first: cash, selling costs, or whether the target still fits?

This is a fictional snapshot, not a recommended allocation or trade. Arithmetic excludes taxes, fees, spreads and price movements. Both buying and selling can involve costs; account rules differ. Check the original goal before rebalancing and protect money needed for bills or emergencies. Partial contributions do not promise a future target or return. Rebalancing cannot prevent losses or guarantee higher returns. General education, not individualized advice.

WATCH NEXT: Diversification Explained https://www.youtube.com/watch?v=b-PpWxJG2Do

SOURCE: Investor.gov guide to asset allocation, diversification and rebalancing (US educational source; no local tax rule is generalized). https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset

Original fictional characters, approved voices and AI-assisted character animation; locally rendered arithmetic. Final 1.1x speed with pitch preservation.

00:00 Same target, different cash 00:21 The fictional starting portfolio 01:01 Choose a repair 01:23 Sell and reinvest $1,000 01:52 Add $2,000 without selling 02:14 Why adding $1,000 differs 02:38 Only $500 available 03:22 Taxes, costs and protected cash 03:46 Choose a review rule 04:02 Ben’s checklist

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