Rebalancing with new contributions (no selling)
Selling to rebalance can trigger trading costs and, in a taxable account, capital gains tax. If you are adding money anyway, you can send it to the underweight assets instead. Switch the calculator to New contributions only, enter the cash you are adding and press Calculate. It answers two questions: how to split this contribution, and how much cash would bring every asset back to target without selling anything.
How the split is calculated
After investing contribution C, the portfolio is worth V + C, so each asset's target value is its target weight times (V + C). The calculator chooses non-negative purchases that add up to C and make the final weights as close as possible to the targets (it minimises the sum of squared drifts). In practice the most underweight asset is filled first until it is level with the next one, then both are filled together, and so on. Overweight assets receive nothing.
The cash needed to hit every target exactly is the largest value of holding ÷ target weight across your assets, minus today's total: Cmin = max(vi / ti) − V. If you hold an asset whose target is 0%, no amount of buying can bring it to 0%, so an exact result is impossible without selling.
Worked example
You hold $70,000 of stocks and $30,000 of bonds (70/30) and want 50/50. With $20,000 of new cash, all of it goes to bonds: the portfolio becomes $70,000 / $50,000, or 58.33% / 41.67%, still 8.33 points from target. You would need $140,000 − $100,000 = $40,000 to reach 50/50 exactly (all into bonds). With $100,000 you would buy $30,000 of stocks and $70,000 of bonds and land exactly on 50/50.
| New cash | Buy stocks | Buy bonds | Weights after | Exact? |
|---|---|---|---|---|
| $0 | $0 | $0 | 70.00 / 30.00 | No |
| $20,000 | $0 | $20,000 | 58.33 / 41.67 | No |
| $40,000 | $0 | $40,000 | 50.00 / 50.00 | Yes |
| $100,000 | $30,000 | $70,000 | 50.00 / 50.00 | Yes |
With three or more assets the rule matters. Holding $50,000 / $30,000 / $20,000 with targets 20% / 40% / 40% and adding $30,000, the gaps to target are $22,000 and $32,000 for the last two assets. Filling the largest gap first gives buys of $0 / $10,000 / $20,000, which leaves both underweight assets at the same weight (30.77%). Splitting the cash in proportion to the gaps would put $12,222 and $17,778 into them and leave them further apart.
For a full discussion of thresholds, calendars and costs, read the guide to how often to rebalance. If you are deciding how to invest a large sum over time, compare lump sum vs dollar cost averaging.
Contribution rebalancing FAQ
Can I rebalance without selling?
Yes, if your new contributions are large enough relative to the drift. The calculator shows the minimum cash that restores every target exactly. Smaller contributions move you part of the way, and the table shows the drift that remains.
Why does the calculator put all my cash into one asset?
Because that asset is the furthest below target. Buying anything else would leave the portfolio further from your targets. Once the gap closes to the level of the next underweight asset, both receive cash.
Are trading costs and taxes included?
Not in contribution mode: nothing is sold, so no capital gains are realised, and per-trade fees depend on your broker. Use the Buy & sell mode to estimate costs and tax when selling is on the table.
What if my targets do not add up to 100%?
The calculator stops and asks you to fix them rather than rescaling silently, because a rescaled target is not the allocation you chose.
Educational tool only, not investment advice. Results ignore fractional-share limits, minimum trade sizes, fees and taxes.