Rebalancing  

Five things to know about rebalancing: 

  1. Reasons to rebalance
  2. How to rebalance a pie
  3. How to rebalance an entire portfolio
  4. Dynamic rebalancing
  5. M1 automatically rebalancing portfolio

 

Reasons to rebalance  

Rebalancing returns your portfolio to the target percentages you set.  

As prices of securities change over time, your initial target allocations may drift. This might result in a portfolio that no longer aligns with your investing style.   

Rebalancing allows you to reallocate funds to keep your portfolio in line with your financial goals. 

 

Potential Tax Implications 

Any time you rebalance your portfolio you may initiate buys and sales of stocks. 

 

Sales of securities may carry tax implications which you should always consider before making the decision to rebalance. 

 

How to rebalance an entire portfolio 

Desktop 

1. Navigate to the Portfolio you would like to rebalance. Select the “Rebalance” button 

M1 Finance web account screen portfolio

2. Select “Confirm” 

M1 Finance web account screen confirm rebalance

Mobile 

1. Navigate to the Portfolio you would like to rebalance 

M1 Finance mobile account screen portfolio

2. Tap “Manage Pie” and “Rebalance” 

M1 Finance mobile account screen manage pie, rebalance

3. Select “Confirm” 

M1 Finance mobile account screen confirm rebalance

This will rebalance all Pies within your portfolio. 

 

How to rebalance a pie 

 1. Navigate to the specific pie you would like to rebalance 

M1 Finance web account screen slices in portfolio

2. Select the “Rebalance” button 

M1 Finance web account screen slice in pie details

 3. Select “Confirm” 

M1 Finnace web account screen confirm rebalance for slice

This will rebalance that specific pie within your portfolio. 

If your portfolio is made up of several Pies, the Pies will be brought to their target percentages, but the Slices within those Pies will likely remain under or overweight. 

 

Dynamic rebalancing  

With M1's Dynamic Rebalancing, every trade with new cash in your portfolio pushes you closer to the target percentages you set.  

That means you can invest cash into your Pie and maintain your investment targets without any manual calculations.  

Whenever your account makes new trades, the algorithm identifies slices that are most relatively underweight and puts money in those first. 

When removing cash from a portfolio, the algorithm identifies slices that are most relatively overweight and removes money from those first.  

 

M1 automatically rebalancing portfolio  

M1 will never initiate a rebalance of your portfolio without your instruction. 

If you want your holdings to match your target portfolio, you will have to initiate a rebalance manually. 

 

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