How to rebalance your M1 Invest Account

Rebalancing returns your portfolio to the target percentages you set.

As prices of holdings change over time, your allocations may drift from your targets. If you feel like a Pie no longer aligns with your investing style, rebalancing is an option, and there are two ways to do it.

Rebalance in your next trade window

  1. Navigate to your Invest tab
  2. Select the Portfolio tab
  3. Select the “rebalance” button below the Pie when viewing your full portfolio
    - If you are on mobile, this option will be under the “Manage Pie” button

Keep in mind that rebalancing your portfolio will only bring your portfolio back to its target percentages by buying and selling Slices during your next trade window. If you are looking to rebalance an Individual Pie within your portfolio, please refer to the instructions below:

  1. Navigate to your Invest tab
  2. Select the Portfolio tab
  3. Select the individual Pie you are looking to rebalance
  4. Select the “rebalance” button below the Pie
    - If you are on mobile, this option will be under the “Manage Pie” button

Please note: Any time you rebalance, you will generally be initiating a series of buy and sell transactions. Usually, every sale of a security has tax implications which may be a gain or a loss. 

 

Rebalance over time through dynamic rebalancing

With auto-invest on, each deposit made goes towards the underweight Slices in your Portfolio to bring those Slices closer to their target percentages. To trigger your auto-invest, each deposit made must exceed your chosen minimum cash balance by $25.

With this strategy, there are no taxable events as there are no sells in the account.

You can automate these deposits by setting up recurring deposits.

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.

 

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.

 

All investing involves risk, including the risk of losing the money you invest. Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.

M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

 

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