Rebalancing involves undertaking a series of transactions to keep a portfolio’s asset allocation in line with a target asset allocation and risk-and-return profile. Over time, a portfolio’s asset allocation will change as the prices of investments in the portfolio change. Asset allocation can also be affected by inflows and outflows of money, including contributions, distributions, interest and dividend payments. If left unchecked, a portfolio’s asset allocation and its associated risk-and-return profile can change drastically and potentially expose the investor to significantly more risk than they intended.