Does rebalancing generate taxes?

Yes, in a standard brokerage account (CTO) or a PEA before 5 years, sales generate taxable capital gains. In a life insurance policy (assurance vie), switches between funds are tax-neutral as long as you do not make a withdrawal. In a PER, switches are also without tax impact. Favour tax-advantaged wrappers for your rebalancing.

Can you rebalance by injecting capital rather than selling?

Absolutely, this is actually the recommended method! Rather than selling overweighted asset classes, you can direct your new contributions towards underweighted ones. This approach avoids transaction fees and capital gains taxation.

What target allocation should you choose?

The target allocation depends on your risk profile, investment horizon and goals. A dynamic profile might aim for 80% stocks and 20% bonds, while a conservative profile would opt for 30% stocks and 70% bonds/euro funds. The important thing is to define a target consistent with your risk tolerance and stick to it.

ÉpargneMalinEN

Mis à jour mai 2026

ByMottalib Radif

Portfolio Rebalancing Calculator

Q: How often should you rebalance your portfolio?

The optimal frequency depends on your strategy: once a year is sufficient for most investors. Some prefer to rebalance when an asset class deviates by more than 5 percentage points from its target. Avoid rebalancing too frequently to limit transaction costs.

Calculate the trades needed to realign your asset allocation to your target. Identify which asset classes to reinforce and which to trim.

Your asset classes

Total target: 100%

Asset class name

Current value

€

Target (%)

€

Total portfolio

60 000 €

Asset class	Current value	Current %	Target %	Target value	Action	Amount
Stocks	35 000 €	58,33 %	60,0 %	36 000 €	Buy	1 000 €
Bonds	12 000 €	20,0 %	20,0 %	12 000 €	Hold	-
Real Estate	8 000 €	13,33 %	15,0 %	9 000 €	Buy	1 000 €
Cash	5 000 €	8,33 %	5,0 %	3 000 €	Sell	2 000 €

Why rebalance your portfolio?

Over time, the different asset classes in your portfolio evolve at different rates. Stocks may outperform bonds for several years, causing your allocation to drift away from your initial target. This drift can increase your portfolio risk beyond your tolerance.

Rebalancing involves selling overweighted assets and buying underweighted ones to return to your target allocation. This discipline has two benefits: it controls risk and mechanically forces you to sell high and buy low, which can improve long-term performance.

The ideal rebalancing frequency is generally annual or semi-annual. Rebalancing too often generates unnecessary transaction costs, while never rebalancing lets risk drift. A common rule is to rebalance when an asset class deviates by more than 5 percentage points from its target.

Questions fréquentes

Disclaimer: This simulator provides a mechanical rebalancing calculation. It does not constitute investment advice. Consider transaction costs, taxation and your personal situation before making any trades. Consult a financial advisor for a tailored strategy.

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