Over time, market movements change your portfolio mix. If stocks rally, they can take up more of your allocation than you intended, leaving you exposed to larger drawdowns.

Rebalancing brings your holdings back to target weights. You can do this by selling outperformers, buying more of underweight assets, or directing new contributions to the areas that need it.

Schedule a check-in at least once a year or when allocations drift more than five percentage points from target. Always consider transaction costs and taxes before making adjustments.