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. Left alone, your winners swell their share and quietly push your risk higher than you intended. Drift isn't a mistake — it's gravity — which is why a rebalancing rule exists to pull the mix back to target.

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.

Allocation drift is taught hands-on in Stage 3Know Yourself: Risk Tolerance & Time Horizons.

See the lesson →

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