rebalioBuy below the band.
When the asset becomes underweight, use available cash to restore its share. A lower price alone is not a signal; the allocation must breach the lower boundary.
Portfolio rebalancing.
Backtest the strategy.
You cannot choose the next market move. You can choose how much of your portfolio moves with it. Threshold rebalancing turns that choice into a clear, repeatable rule.
6 backtestsOne portfolio. Five markets.2021–2026Fixed start · Completed quarterEvery orderVisible, with fees included
01 / Start with a targetPrices move.
Prices move.
Your plan stays clear.
Start with a mix of an asset and cash. As the asset rises, it becomes a larger share of your portfolio. As it falls, its share shrinks. That change in weight is allocation drift.
A relative threshold creates a band around your target. When the invested weight crosses the band, calculate a trade that brings it back toward the target. Within the band, let the portfolio move.
A 15% threshold is 15% of your target allocation, not a 15% price move and not 15 percentage points. At an 80% target, that creates a 68–92% band.
Go deeper in the Academy →A rule you can see80% invested · 15% threshold
Let the allocation tell you when.
Move the current invested weight. Inside the band, do nothing. Outside it, propose one correction back to the target.
0%Lower 68% · Target 80% · Upper 92%100%
Inside the band. No correction.
At the exact boundaries, no trade is triggered. Let ordinary fluctuations pass.
02 / Turn drift into an orderWhen to buy. When to sell.
When to buy. When to sell.
How much to trade.
The trigger comes from your portfolio weight. The order size comes from the value gap to your target.
Sell above the band.
When the asset becomes overweight, sell part of the holding toward your chosen target. You take some exposure off the table without needing to predict the top.
Correct the gap.
Target asset value equals total portfolio value × target weight. Divide the difference from the current asset value by price to calculate the proposed quantity.
Worked example / Before feesA $1,400 correction.
A $1,400 correction.
Not a whole new portfolio.
A $10,000 portfolio with $9,400 invested is 94% invested: above the 92% upper boundary. An 80% target calls for $8,000 invested. The value gap is a $1,400 sell; at $100 per unit, the proposed order is 14 units.
Current asset value$9,400
Target asset value− $8,000
Proposed sell value$1,400
A 0.2% fee on this order is $2.80. Fees reduce equity, so the final weight can differ slightly from the target.
03 / Understand the tradeoffDifferent markets.
Different markets.
Different reasons to rebalance.
Rebalancing manages exposure. Its effect on returns depends on the path prices take.
In a sustained rally
Selling overweight assets realizes some gains and replenishes cash. But that cash and those sales can leave a threshold strategy behind a fully invested buy-and-hold portfolio.
In a sustained decline
A cash reserve initially limits exposure. Buying below the band redeploys that cash, which can help in a recovery or increase losses if the asset keeps falling.
In an oscillating market
Repeated moves across the band can create opportunities to sell higher and buy lower. Fees, the size of the swings, and the threshold determine whether those trades help.
These describe strategy mechanics, not forecasts. Market cycles are visible in hindsight; allocation thresholds do not predict them.
04 / Explore the evidenceLess theory.
Less theory.
More numbers you can inspect.
All backtests use the app’s invested-asset drift and order-sizing logic, with optional dynamic cash. Only breached assets receive corrections. Adjust the threshold, follow the equity curve and inspect every simulated order.
Start here / Diversified portfolioSix allocations.
Six allocations.
One portfolio comparison.
Compare rebalancing with buy-and-hold across the S&P 500, Nasdaq-100, Bitcoin, Ethereum, gold and USD with optional dynamic cash and a fixed buy-and-hold benchmark.
S&P 500 · 25%Nasdaq-100 · 25%BTC · 20%ETH · 15%Gold · 10%USD · 5%
Compare portfolio rebalancing vs buy-and-hold ↗BTC · USD01
Bitcoin
How much of Bitcoin's upside would you exchange for a more controlled allocation?
Open the interactive analysisETH · USD02
Ethereum
When does keeping cash help an Ethereum portfolio—and when does it hold it back?
Open the interactive analysisNDX · Price index03
Nasdaq-100
How does a cash reserve change the path of a Nasdaq-100 portfolio?
Open the interactive analysisS&P 500 · Price index04
S&P 500
When does rebalancing help an S&P 500 portfolio, and when does cash reduce returns?
Open the interactive analysisGLD · USD05
Gold
How does keeping cash and rebalancing change a gold allocation?
Open the interactive analysisDaily Yahoo Finance prices in USD for Bitcoin, Ethereum, the Nasdaq-100, S&P 500 and gold (GLD). Crypto trades every day; stock indices and GLD follow US market sessions. Index backtests model hypothetical units and exclude dividends. The dataset starts January 1, 2021 and extends through the last published completed quarter.
A strategy you remain in control ofResearch the rule.
Research the rule.
Review the trade.
The backtests simulate a daily rule. In Rebalio, you set targets, preview proposed market orders, and explicitly approve each rebalance. Rebalio does not automatically execute this simulator's daily trades.
See how Rebalio works ↗What the numbers cannot promise
Historical results do not guarantee future performance. These simulations assume full fills at daily opening prices, constant-value cash, and the fees you choose. They exclude taxes, spread, slippage, interest, liquidity limits, and exchange minimum order sizes.
Threshold rebalancing is a way to apply an allocation decision consistently. Choosing an asset, a cash target, and a threshold still requires your judgment. Investing involves risk, including loss of principal.