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rebalancing
In financial contexts, this term describes a disciplined strategy to manage risk. It is not merely about adding assets, but specifically about selling high-performing assets and buying underperforming ones to return to a predetermined percentage split. This creates a systematic "buy low, sell high" mechanism.
In mechanical engineering, the term refers to the physical removal or addition of mass to eliminate centrifugal forces. This is a technical process used to ensure the longevity of rotating machinery by preventing destructive vibrations.
Meanings
The process of adjusting the proportions of assets in an investment portfolio to maintain a specific target allocation.