Rebalancing is how disciplined investors buy low and sell high systematically. When stocks rally, your equity allocation drifts up - rebalancing forces you to trim winners. When markets crash, you're buying more at lower prices. This mechanical discipline beats emotional decision-making.

The key questions are when and how. Calendar-based rebalancing (quarterly, annually) is simple but arbitrary. Threshold-based triggers (rebalance when drift exceeds 5%) are more responsive. Tax-aware execution ensures you're not giving back gains to the IRS.

In this topic, you'll learn to design a rebalancing strategy that fits your goals - whether you're managing your own portfolio or hundreds of client accounts.