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Calendar Rebalancing
Definition
This is the process of rebalancing a portfolio to its target weights on a periodic basis. This may occur at an interval of your choosing, i.e. monthly, quarterly, annually, etc.
Using the term Calendar Rebalancing :
Mrs. Jones keeps her portfolio appropriately allocated by following a regular schedule of calendar rebalancing.
Pay Special Attention To :
Automatic rebalancing techniques are generally a good idea, but be careful not to rebalance too often. Monthly should be the most you should consider, with perhaps quarterly or even annually as more optimal. This is primarily due to the high expense and tax consequences of high turnover strategies (i.e. frequent rebalancing).
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Related terms
Trading , Portfolio Allocation
