Discipline that should not force capital into a broken thesis.
| Concept | Explanation | |---|---| | Calendar rebalancing | Restore targets on a regular schedule. | | Threshold rebalancing | Act when weights move outside permitted bands. | | Thesis-based rebalancing | Adjust when expected return or risk changes. | | Tax-aware rebalancing | Consider realized gains and losses. | | Flow-based rebalancing | Use new contributions or withdrawals to restore targets. |
Rebalancing can impose discipline by trimming appreciated exposures and adding to underweights, but it should not force capital into a broken thesis.