Rebalancing keeps your portfolio aligned with your target risk allocation.
Quarterly rebalancing typically improves risk-adjusted returns vs buy-and-hold.
This tool is essential for comparing trades across different assets, fee structures, or holding periods. The annualised return figure puts short and long-duration trades on the same scale for fair comparison.
A common mistake is confusing gross return with annualised return. A 60% gain sounds impressive until you factor in it took 4 years — which is an annualised CAGR of about 12.9%, useful context for comparing against other investments.
A trader holds a position that has doubled from the entry price and wants to know the exact net proceeds after the platform's 0.15% trading fee and an estimated 20% capital gains tax rate. The calculator returns the exact take-home figure — not the gross gain that the exchange UI displays.
Quarterly or when allocations drift more than 5% from targets.