Portfolio Rebalancing: The Underrated Habit That Boosts Returns
4 min read · 2026-07-02
Say you set a 70% equity / 30% debt portfolio. After a bull run, equity might grow to 85% — now you're taking more risk than you intended. Rebalancing fixes that.
What it is Periodically resetting your portfolio back to its target allocation by trimming what's grown and topping up what's lagged.
Why it works - Controls risk — stops equity from quietly ballooning. - Enforces discipline — you automatically sell high (trim winners) and buy low (add to laggards) without emotion.
How often? - Time-based: once a year is plenty for most investors. - Threshold-based: rebalance when an asset drifts more than ~5–10% from target.
Do it tax-smartly Rather than selling (which triggers capital gains), redirect new SIP money toward the underweight asset. Only sell to rebalance when necessary, and mind taxes.
Check your current mix and concentration in My Desk → Portfolio Analyzer.
Put this into practice
Find funds matched to your goal, or back-test a SIP on real NAVs.
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Educational content only — not investment advice. Mutual fund investments are subject to market risk; read all scheme-related documents carefully.