Rebalancing Overview

Rebalancing is a sophisticated tool to help you rebalance your portfolio as well as perform explicit trade planning. The Rebalancing Facility is located under Portfolio Tools as shown below.

Portfolio rebalancing allows you to set desired allocations for stocks in your portfolio by percentage. You can also set a drift tolerance, which is how much you are willing allow your portfolio stray from your desired allocations. Stock Rover will then show you what is out of balance and by how much, as well as the trades you need to make to get back in balance.

The rebalancing facility in Stock Rover also facilitates trade planning. Trade planning is done by switching the planning mode to quantity. You can then make changes to the quantities held for various positions in your portfolio. You can also add new tickers or eliminate positions.

Both rebalancing and trade planning allows you to test potential trades. Based on your planning input, an alternative version or model of your portfolio is created. You can then compare the planned or model portfolio against your actual portfolio across number of key analytics such as historical return, maximum drawdown, risk adjusted return vs. the S&P 500, correlation with the S&P 500, beta, volatility and the Sharpe ratio.

You will also be able to see the difference in aggregate financial measures for the actual vs. planned portfolio for such things as Price/Earnings, Price/Book and Price/Sales, as well as aggregate dividends and dividend yields. You will also be able to examine differences in the sector allocations of the actual vs. planned portfolio.

The goal of the rebalancing facility is to assist you in making intelligent changes to your portfolios to achieve your investment objectives by demonstrating how potential trades affect the portfolio across many different factors.


Rebalancing Mechanics