Rebalancing is when the algorithm SoFi uses sells some of the ETFs that have gone up in value and buys more of the ones that went down, based on the output from an algorithm, in order to keep your portfolio close to its original mix of investments. It’s important to do this periodically.
SoFi looks at portfolios on a daily basis (on days the market is open) and runs an algorithm to see if any one asset is more than 5 percentage points off its target. If so, the algorithm then trades in the account to rebalance based on its results. The account will also be rebalanced in the following circumstances:
- The cash in your account is above our threshold of $50.
- If you choose to change the strategy in which you are invested.
- Anytime SoFi changes your portfolio allocation as a result of a decision by the Investment Committee, which meets on at least a quarterly basis.
The end goal is to automatically keep your portfolio on track for your stated goals.