Auto Rebalancing Guide

understanding portfolio rebalancing rebalancing is a powerful portfolio management strategy that involves periodically adjusting your asset holdings to maintain your desired allocation percentages this systematic approach helps manage risk and may enhance returns by implementing a disciplined "buy low, sell high" methodology how rebalancing works in ai baskets the rebalancing process allocation comparison the system compares your current asset allocations against your target percentages when actual allocations drift beyond set thresholds, rebalancing is triggered transaction execution overweight assets (those exceeding their target allocation) are partially sold proceeds are used to purchase underweight assets (those below their target allocation) the result is a portfolio that matches your original allocation strategy automation advantage the entire process happens automatically according to your schedule no emotional decision making or manual calculations required the case for rebalancing real results a defi leaders basket with approximately $10,000 initial investment was tracked from september 2023 to october 2024, comparing rebalancing versus buy & hold buy & hold result $19,527 (+95 27% return) monthly rebalancing result $30,508 (+205 08% return) the rebalanced basket significantly outperformed by systematically buying assets at lower prices and selling at higher prices throughout the volatile period setting up auto rebalancing for preset baskets all preset baskets include automatic weekly rebalancing, executed every monday at 00 00 utc for custom baskets (pro users) access basket settings navigate to your custom basket's management page locate the "auto rebalancing" section enable auto rebalancing toggle the rebalancing switch to "on" configure rebalancing schedule not available yet daily select a specific time weekly choose a day of the week and time monthly select a day (1 28) and time save your settings confirm your selections the system will automatically rebalance according to your schedule for regular users regular users can perform manual rebalancing on their custom baskets navigate to your basket select the basket you wish to rebalance initiate manual rebalance click the "rebalance now" button confirm the action review results check the transaction history to see the trades executed during rebalancing note manual rebalancing is limited to once every 24 hours strategic considerations for rebalancing optimal rebalancing frequency the ideal frequency depends on several factors market volatility higher volatility may benefit from more frequent rebalancing less volatile markets may require less frequent adjustments transaction costs consider any fees associated with trades more frequent rebalancing means more transactions and potentially higher costs tax implications rebalancing involves selling assets, which may have tax consequences consider consulting a tax advisor when implementing an aggressive rebalancing strategy when to adjust rebalancing settings consider modifying your rebalancing strategy during extreme market volatility you might pause automatic rebalancing during major market crashes resume once markets stabilize to avoid excessive trading during high volatility trending markets in strongly trending markets, less frequent rebalancing may be advantageous this allows winning positions more room to grow before trimming portfolio size changes after significant capital additions or withdrawals when making major changes to your asset allocation targets rebalancing vs buy & hold when each shines rebalancing advantages volatile and sideways markets rebalancing typically outperforms during choppy or ranging markets risk management provides systematic protection against overconcentration in any single asset behavioral benefits removes emotional decision making from the investment process buy & hold advantages strong bull markets may outperform during powerful, sustained uptrends tax efficiency fewer taxable events than regular rebalancing simplicity requires less management and fewer decisions more info https //docs sagemaster io/marketplace/chapter 3 case studyrebalancing vs buy and hold "if it's your game and you really know your business, you can load up but if you're not an expert, participate in total diversification and simply rebalance along the way " — inspired by warren buffett's investment philosophy happy trading! the sagemaster team