Rebalancing your DEGIRO portfolio: how much to buy to restore your target allocation?

Rebalancing means bringing your portfolio back to your target allocation, either by selling and redistributing or by buying only; for a 60%/40% target allocation and a portfolio of €70,000 in stocks / €30,000 in bonds, you'd need to buy roughly €16,666.67 more in bonds to get back to 60%/40%.

Why your allocation drifts out of balance on its own

Imagine a target allocation of 60% stocks and 40% bonds. If stocks outperform bonds, that part of your portfolio automatically grows faster — without you doing anything, your split keeps shifting toward more stock risk than you originally intended. Rebalancing means: adjusting to get back to your target split.

The two ways to rebalance

• Sell and redistribute — sell part of the best-performing asset class and use it to buy more of the rest. Works immediately, but comes with transaction costs. The commonly cited tax argument against this is, for most retail Box 3 investors, actually less relevant than it sounds: Box 3 taxes your wealth on the reference date, not the profit you realise on a sale — the real downside of selling is the transaction costs, not the tax authority.
• Buy-only — direct new contributions or dividends to top up the underrepresented asset class, without selling. Slower, but without the downsides of selling. Why not just sell? Because that often costs more than it’s worth. In practice, most retail investors we see choose to buy rather than sell — not because it performs better, but because selling adds transaction costs and administrative hassle for something that sorts itself out anyway through new contributions.

Worked example: buy-only

Your target allocation is 60% stocks / 40% bonds. Your portfolio currently consists of €70,000 in stocks and €30,000 in bonds (€100,000 total) — so effectively 70%/30%, too much stock risk.

You want to fix this by only buying more bonds, without selling any stocks. How much do you need to buy? With x as the amount of bonds to purchase:

(€30,000 + x) ÷ (€100,000 + x) = 40%

Solving this gives:

x = (40% × €100,000 − €30,000) ÷ 60% ≈ €16,666.67

After this purchase: €70,000 in stocks and €46,666.67 in bonds, on a total of €116,666.67 — exactly back to 60%/40%.

On paper, simple.

When you should actually bother rebalancing

The question of how much to buy is answered above, but at least as important is the question of when. Rule of thumb: most professional rebalancing strategies only step in once the allocation drifts 5 percentage points or more from target — not at every small price swing. Rebalance more often than that, and you’re mostly paying extra transaction costs for very little additional risk control, and pushing up your portfolio turnover ratio.

Why this is more than dividing two amounts

This example uses just two asset classes. As soon as you split across multiple dimensions at once — asset class, sector, geography, investment style, market cap — the question “what should I buy, and in which specific position” quickly becomes too complex for a simple ratio calculation, because a shift in one dimension also affects the others. Heavy concentration in a single position or sector makes this even more pressing — see also ETF overlap and concentration and position size based on risk/reward.

How ClearAnalyser calculates this for you

The 5D rebalancing simulator in ClearAnalyser categorises your holdings across five dimensions at once and instantly calculates how many euros you need to add to a specific position to get back to your target allocation — without having to work it out per asset class yourself. Which other tools offer rebalancing is shown in the DEGIRO portfolio tracker comparison.

Sources: Vanguard research on rebalancing frequency and thresholds in portfolio management.