The process of altering the allocation of assets in an investment portfolio to maintain the intended level of risk and return is known as rebalancing.

It involves selling some assets that have appreciated in value and buying more of the assets that have underperformed, in order to maintain the portfolio’s original asset allocation.

The goal of rebalancing is to keep the portfolio in line with the investor’s objectives and risk tolerance over time and to avoid taking on too much risk or missing out on potential gains.