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This guide covers rebalancing, bringing a portfolio back in line with your target weights and risk after positions have drifted. Winners grow into oversized positions, losers shrink, and what was once balanced becomes concentrated. Rebalancing is how you reset, and Driven lets you model the impact before you act. The Skill behind this workflow is Portfolio Monitor.

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When to use this

  • Positions have drifted from their target weights
  • A winner has grown into an oversized position
  • Your portfolio has become more concentrated than intended
  • You want to model changes before making them

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Step 1: See the drift

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Step 2: Model the rebalance

Before trading, see what the changes would do:

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Step 3: Weigh the trade-offs

Rebalancing is not free of judgment. Trimming a winner has costs:
Sometimes an oversized winner reflects a strengthening thesis, not just price drift. Distinguish the two.

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Step 4: Execute in the paper account

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Rebalancing approaches

There is no single right method. Common ones:
  • Calendar-based — rebalance on a fixed schedule (quarterly, annually), regardless of drift
  • Threshold-based — rebalance only when a position drifts beyond a set band (e.g. ±5% from target)
  • Opportunistic — rebalance when adding new capital or when a thesis changes
Ask the Agent to help you reason about which fits your strategy.

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Common mistakes

  • Rebalancing too often. Frequent rebalancing racks up friction and can cut winners short. Use bands or a schedule.
  • Trimming winners reflexively. A position above target because the thesis is strengthening is different from one above target on a momentary pop.
  • Ignoring the tax and cost reality. In a real account, rebalancing has costs. Model trades in paper, but remember the difference when applying to real capital.