Rebalancing

 

It is expected that each portfolio’s actual asset allocation will vary from its initial asset allocation due to normal price variations in the stock market. This can affect portfolio performance and impact the target risk and asset class allocations of your portfolio. Honest Dollar has two automatic features to help keep your portfolio on track for your target allocation:

  1. Each time you make a deposit into your Honest Dollar account your money will be invested into the fund that has deviated from the targeted allocations the most. This will help keep your portfolio on track to the target allocation throughout the quarter.
  2. At the end of each quarter Honest Dollar will evaluate whether the underlying investments in your portfolio are aligned with the initial asset allocation. If the allocation is outside of certain parameters, we will perform an account rebalance in order to keep your portfolio on track for your target allocation. Honest Dollar will rebalance your account by trading ETFs until they reach the target mix. The quarterly maintenance of your account helps maintain the target allocation for your portfolio. No additional fees for trading will be assessed to you for rebalancing transactions.