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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

Show me how my current portfolio weights compare to my targets. Which positions have drifted most, and where am I now over- or under-weight?

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Step 2: Model the rebalance

Before trading, see what the changes would do: 
Propose a rebalance back toward my targets. Show me what trades it would take and how the portfolio's concentration and risk would change afterward.

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Step 3: Weigh the trade-offs

Rebalancing is not free of judgment. Trimming a winner has costs: 
If I trim my biggest winner back to target, what's the case for and against doing that right now? Is the position oversized on conviction or just on drift?
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

Execute the rebalance in my paper account using the weights we agreed, and confirm the new allocation.

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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.