What is Rebalancing? | SIE, SERIES7, SERIES65 Exam Prep

Rebalancing is the process of periodically adjusting a portfolio back to its target asset allocation by buying underweighted assets and selling overweighted ones. This risk management strategy can be calendar-based (e.g., quarterly or annually) or threshold-based (when allocations drift beyond set limits). 📚 Learn more about Rebalancing and other key terms for your SIE, SERIES7, SERIES65 exam at Open Exam Prep. 🎯 This term appears on: SIE, SERIES7, SERIES65 🔗 Full glossary: https://www.open-exam-prep.com/glossary 🔗 Rebalancing definition: https://www.open-exam-prep.com/glossary/rebalancing 💡 Exam Tip: Rebalancing maintains TARGET ALLOCATION and controls RISK. Calendar-based (e.g., annually) or threshold-based (e.g., 5% drift). Purpose is risk management, NOT return maximization. New contributions can rebalance tax-efficiently. --- #securities #examprep #financeexam #sie #series7 #series65