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Automated rebalancing Meaning

Rebalancing is the practice of periodically adjusting a portfolio’s asset allocation to maintain the desired mix of stocks, bonds and other investments. Automated rebalancing refers to using software or robo‑advisors to perform this task without human intervention. The system monitors the portfolio, determines when allocations stray beyond predetermined thresholds and executes trades to bring the weights back in line.

By automating rebalancing, investors maintain diversification and risk levels consistent with their goals. For example, if equities outperform and grow to exceed their target weight, the system will sell a portion of the equities and purchase bonds or other assets. This discipline helps investors avoid the temptation to chase returns and instead follow a systematic approach.

Automated rebalancing is a core feature of many employer‑sponsored retirement plans and digital advisory platforms. Investors can set parameters for frequency (quarterly, semi‑annually, etc.), minimum drift thresholds and tax considerations. The convenience of automation reduces administrative burden and ensures that portfolios remain aligned with changing market conditions and life stages.

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Important Disclaimer:

Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

Finery Markets’ software is non-custodial and is provided exclusively to licensed institutional entities that act as independent operators of their own environments. All counterparties are solely responsible for establishing and maintaining their own bilateral trading and settlement relationships. Finery Markets is not a party to any such arrangements and assumes no responsibility for the conduct, verification, or compliance obligations of any users of the software.

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