Rebalancing a portfolio across stocks, gold and crypto
Updated 3 November 2026
Rebalancing means bringing your portfolio back to the mix you chose after the market has moved it. The mix is your decision; rebalancing just keeps it from drifting.
Why a portfolio drifts
Say you decide on a mix of four asset classes. Over a year one of them rises faster than the others, and its share of the portfolio grows without you buying any more. Left alone, the portfolio slowly becomes a different one from the one you chose, usually with more risk in whatever has risen most.
A worked example
The numbers below are made up to show the arithmetic. They are not a suggested mix.
| Asset class | Target | Value now | Share now | To get back to target |
|---|---|---|---|---|
| Indian equity | 40% | ₹46,000 | 46% | sell ₹6,000 |
| US equity | 20% | ₹19,000 | 19% | buy ₹1,000 |
| Gold | 20% | ₹17,000 | 17% | buy ₹3,000 |
| Cash | 20% | ₹18,000 | 18% | buy ₹2,000 |
| Total | 100% | ₹1,00,000 | 100% |
When to rebalance
- On a calendar. Check once a month or once a quarter and trade back to target. Simple, but it trades even when the drift is tiny.
- On tolerance bands. Trade only when a class is more than a set distance from its target, for example 5 percentage points. In the table, Indian equity is 6 points over, so a 5-point band would trigger a trade and the others would wait.
- Both. Look on a calendar, act only outside the bands. Fewer trades, and the mix never strays far.
Costs and taxes in India
Every sale can cost brokerage and charges and can trigger capital-gains tax. Rates change with the Union Budget, so check the current ones, but at the time of writing listed equity gains are taxed at 20% if held a year or less and at 12.5% above ₹1.25 lakh a year if held longer, while gains on crypto are taxed at 30% with 1% TDS on transfers and no set-off of losses.
One way to sell less is to rebalance with new money: put each month’s contribution into whatever is under its target, and sell only when that isn’t enough.
How it works in Purffle Wealth
- Choose your mix. Pick a risk profile in Settings, or switch on custom targets and set your own weight for each asset class.
- Add holdings with no API as manual holdings, so the targets see your whole portfolio.
- Check the drift on the Overview screen, where each class shows its share now against its target.
- Generate a plan. It lists the orders that would bring the mix back, sells before buys.
- Approve or reject it. Nothing is sent until you approve, and in paper trading the orders fill with pretend money.
Questions
How often should I rebalance?
There is no single right answer. Many people look monthly or quarterly and trade only when a class is outside a tolerance band, which keeps trading and tax down.
Does Purffle Wealth choose my targets?
No. You pick a risk profile or set your own weights, and you approve every order a plan contains.
Do manual holdings count toward my targets?
Yes. Gold, fixed deposits or PPF that you add by hand count toward the mix, but the app never trades them.
Related
Please read: Purffle Wealth is software you run yourself. It is not investment advice; Purffle is not a SEBI-registered adviser. Investments are subject to market risk. This guide is general information, not advice for your situation. Read the terms before you invest.