1. Rebalancing என்னன்னு?
Target allocation-ல இருந்து drift ஆன portfolio-ஐ back to original ratio-க்கு adjust பண்றது.
Target: 70% Equity + 30% Debt → Bull run 2 years → 83% Equity + 17% Debt.
Rebalance → Back to 70% Equity + 30% Debt. Risk controlled!
2. Why Rebalancing is Critical
70% equity → grows to 83% → next crash: -35% loss instead of planned -25%!
10% extra loss = massive wealth impact over time.
Portfolio stays near target. Crash impact controlled. Recovery faster. Wealth protected!
3. 5% Drift Rule
| Asset | Target | Actual | Drift | Action |
|---|---|---|---|---|
| Equity | 70% | 76% | +6% | TRIGGER! Sell equity |
| Debt | 30% | 24% | -6% | TRIGGER! Buy debt |
| Mid Cap | 20% | 23% | +3% | No action ✓ |
4. Annual Calendar — March 31 = Rebalance Day
Financial year end. LTCG ₹1.25L harvest opportunity. Fresh FY start. Tax planning aligned. Best time for India investors!
- Jan-Feb: Track only, no action
- March 31: 🎯 REBALANCE DAY — full reset
- April: SIP step-up (salary hike)
- Oct-Nov: Mid-year check if major event
5. 3 Rebalancing Methods
💰 Method 1: Sell + Buy
Overweight fund sell → Underweight buy. Classic, direct, immediate.
🔄 Method 2: SIP Redirect
SIP amount change only. No selling. Gradual rebalance.
💵 Method 3: New Lumpsum
Bonus → underweight asset directly. No selling, no tax.
6. Tax-Efficient Rebalancing
- LTCG ₹1.25L Harvest: Every March — sell ₹1.25L profit → zero tax → reinvest same day
- SIP Redirect: No selling = no tax event. Slower but cleanest
- Tax Loss Harvesting: Losing position sell → offset STCG gains
SIP redirect method = zero tax rebalancing. Simply change SIP amount per fund. Over 3-6 months, portfolio naturally rebalances. Best for regular investors!
7. Bull Market Rebalancing
Hardest discipline — sell equity when it's going up! But essential.
83% equity at bull peak → next crash = 35% loss vs 25% planned. Rebalancing = automatic sell high. Set March 31 date. Follow process regardless of market direction!
8. Bear Market Rebalancing
Even harder — buy equity when panic everywhere! But highest returning action.
Equity falls to 55%, target 70% → buy cheap equity from debt proceeds! March 2020 rebalancers bought at bottom → 4x return by Dec 2021!
9. Sample Rebalance — Before vs After
| Fund | Before | Target | Action | After |
|---|---|---|---|---|
| Nifty 50 Index | 48% | 40% | Sell ₹80K | 40% ✓ |
| Flexi Cap | 25% | 25% | No action | 25% ✓ |
| Mid Cap | 17% | 15% | Sell ₹20K | 15% ✓ |
| Short Duration Debt | 10% | 20% | Buy ₹1L | 20% ✓ |
10. Common Mistakes
- 🚫 Tax ignore → SIP redirect prefer, ₹1.25L window use
- 🚫 Monthly/weekly rebalance → Annual only!
- 🚫 Full fund exit → Partial only for rebalancing
- 🚫 Ignore goal timeline → Goal-based adjustment needed
11. Video Watch பண்ணுங்க!
Annual reset, 3 methods, tax-efficient strategy, bull/bear rebalancing — Advanced Module Day 17.