Investing term
What is Allocation drift?
The slow movement of your portfolio away from its target mix as market values change.
Allocation drift is the slow, automatic change in your portfolio's mix as some holdings grow faster than others. You don't have to do anything for it to happen — a strong run in stocks quietly swells their share of the pie, and with it the overall risk of the portfolio, without a single trade being placed.
Drift isn't a mistake; it's gravity. Left unchecked, it means the portfolio you end up holding is riskier than the one you designed — precisely because the winners that ran hardest now dominate. That's the whole reason a rebalancing rule exists: to pull the mix back to the target you actually chose.
A strong stock year quietly pushes a 60/40 mix toward 68/32 — raising your risk above what you chose, without a single trade. Drift is gravity; rebalancing is the fix.
For example
A 60/40 portfolio after a strong stock year can drift to 68/32 — you're now taking more risk than you signed up for, without ever placing a trade.
Learn it by doing
That's Allocation drift in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 3, Know Yourself: Risk Tolerance & Time Horizons).
Try the free lesson →Why it matters to you
Allocation drift matters because it silently raises your risk right when it's most dangerous — after a long bull run, when stocks are expensive and a correction is more likely. The portfolio quietly becomes stock-heavy just before the drop that would hurt a stock-heavy portfolio most. Noticing drift, and rebalancing to correct it, is how you keep your actual risk matched to your intended risk instead of to the market's mood.
⚠ Mistaking drift for a decision
Because drift feels like your portfolio 'doing well', it's tempting to leave it — the winners are winning, after all. But letting the mix ride is an accidental bet, not a choice: you're now holding far more risk than you signed up for. Drift should be corrected on a rule, not admired.