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Investing foundations

Lesson 61 · Written for kid, teen, and little

Fixing Your Mix

Nudge your money back to the mix you picked.

The idea

You pick a target mix, but prices keep moving, so the mix drifts on its own. If stocks climb a lot, your stock slice quietly becomes bigger than you planned, and you end up carrying more risk than you chose. Rebalancing means moving money from the slice that got too big into the slice that got too small, so you land back on your target. Many investors check on a schedule, such as once a year, rather than watching every single day. 🔁

A

Words to know

5

target mix

The split of stocks, bonds and cash you decided you want. For example 70% stocks and 30% bonds.

drift

When prices move and your mix slowly changes by itself. A good year for stocks can turn 70/30 into 80/20 without you doing anything.

rebalance

Moving money around to get back to your target mix. Selling some stocks to bring 80/20 back to 70/30.

trim

Selling a little of a part that has grown into too big a share. Selling enough stock to take it from 80% back to 70%.

top up

Adding to a part of your mix that has become too small a share. Buying bonds to lift them from 20% back to 30%.

Try it — no accountSort into groups

Some moves bring your mix back to target. Some pull it further away.

Sort each move into the right box.

0 / 6 sorted

In the full lesson

  1. 1Sort into groups
  2. 2Work out the number
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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