automatic rebalancing

automatic rebalancing definition - finance
A portfolio-management process in which investments that have appreciated are sold in order to take a profit and the profits are reinvested into sectors that are out of favor. Automatic rebalancing helps investors keep the asset allocation of their portfolios in line with their stated investment goals. Often, automatic rebalancing is used for managing mutual funds, retirement accounts and variable annuities.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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