Dynamic Rebalancing is of the most important features of M1 Finance. Rebalancing your portfolio is necessary from time to time as your allocations among assets stray over time. Let's say you have a 60/40 asset allocation of stocks to bonds and after 6 months, your stocks have increased in value more than your bonds to where your allocation has become 65/35. With a traditional brokerage, rebalancing would require some time and effort - manually calculating the number of shares you need to buy and sell on each side relative to the value of your portfolio to get back to your target allocation of 60/40, and incurring transaction fees in doing so, as well as capital gains taxes if it's a taxable account. Dynamic rebalancing with M1 simply refers to how new deposits are allocated to buy orders based on your specified target allocations. That is, underweight assets are automatically bought with new deposits to bring them back to your target allocation. This means your new deposits will be doing the rebalancing for you. This is especially significant in a taxable account, because it means you can rebalance without doing any actual selling of your securities, thereby avoiding capital gains taxes.