What Is Automatic Rebalancing?

Automatic rebalancing is Acorns’s method of maintaining your specific portfolio allocation.

Market fluctuations may cause some of the securities in your portfolio to appreciate or depreciate in value.

This ensures that the securities in your investment account are proportioned correctly.

Is automatic account rebalancing good?

By switching on the rebalancing feature in their 401(k), the account would automatically sell stocks and buy bonds to return to its intended allocation. Think of it as a sell high / buy low feature. Automatic rebalancing helps to keep risk in check and can potentially enhance returns.

What is Automatic Asset Rebalancing?

Depending on the type of investment, rebalancing can be regular and automatic. For example, funds known as asset allocation funds split their investment assets among stocks, bonds and cash. Rebalancing becomes automatic in order to stay within the portfolio’s objectives and risk parameters.

Is it good to auto rebalance 401k?

The best way to keep your 401(k) account on track is to make sure your contributions are invested according to your asset allocation target. Rebalancing is an important investment management tool available to 401(k) plan participants to help ensure that they have enough retirement assets.

How often should I auto rebalance my 401k?


It’s fine and dandy to just dollar cost average like a machine every time you get paid. Really, there is nothing wrong with that. The reason why I encourage everyone to rebalance twice a year is because it forces you to critically think about your portfolio and assess risk.