Portfolio Rebalancing
Periodically adjusting your crypto holdings to maintain your target allocation percentages.
Explained Simply
Rebalancing means selling assets that have grown above your target allocation and buying ones that have dropped below it. For example, if your target is 50% BTC / 30% ETH / 20% SOL but BTC rallies to 70%, you'd sell some BTC and buy ETH and SOL. This enforces buy-low, sell-high discipline. Most experts suggest rebalancing quarterly or when allocations drift more than 5-10% from targets.
Example
Your portfolio target is 60% BTC / 40% ETH. After a BTC rally it's 75% / 25%. You sell some BTC and buy ETH to restore the 60/40 split.
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This content is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for advice specific to your situation.