Portfolio Rebalance

---
name: portfolio-rebalance
description: "Use this skill when the task requires portfolio rebalance capabilities."
executor: LLM_BEHAVIOR
skill_id: finance.wealth_management.portfolio_rebalance_3
status: ADOPTED
security: {level: high, pii: false, approval_required: true}
anchors:
  - finance
tier: 2
input_schema:
  - name: code_or_task
    type: string
    description: "Code snippet, script, or task description to process"
    required: true
output_schema:
  - name: result
    type: string
    description: "Generated or refactored code output"
  - name: explanation
    type: string
    description: "Explanation of changes or implementation decisions"
---
# Portfolio Rebalance

description: Analyze portfolio allocation drift and generate rebalancing trade recommendations across accounts. Considers tax implications, transaction costs, and wash sale rules. Triggers on "rebalance", "portfolio drift", "allocation check", "rebalancing trades", or "my portfolio is out of balance".

## Workflow

### Step 1: Current State

For each account, capture:
- Account type (taxable, IRA, Roth, 401k)
- Holdings with current market value
- Cost basis (for taxable accounts)
- Unrealized gains/losses per position

### Step 2: Drift Analysis

Compare current allocation to IPS targets:

| Asset Class | Target % | Current % | Drift | $ Over/Under |
|------------|----------|-----------|-------|-------------|
| US Large Cap Equity | | | | |
| US Small/Mid Cap | | | | |
| International Developed | | | | |
| Emerging Markets | | | | |
| Investment Grade Bonds | | | | |
| High Yield / Credit | | | | |
| TIPS / Inflation Protected | | | | |
| Alternatives | | | | |
| Cash | | | | |

Flag positions exceeding the rebalancing band (typically ±3-5%).

### Step 3: Trade Recommendations

Generate trades to bring allocation back to target:

**Tax-Aware Rebalancing Rules:**
- Prefer rebalancing in tax-advantaged accounts (IRA, Roth) first — no tax consequences
- In taxable accounts, avoid selling positions with large short-term gains
- Harvest losses where possible while rebalancing
- Watch for wash sale rules (30-day window) across all accounts
- Consider directing new contributions to underweight asset classes instead of trading

**Trade List:**

| Account | Action | Security | Shares/$ | Reason | Tax Impact |
|---------|--------|----------|----------|--------|-----------|
| | Buy/Sell | | | Rebalance / TLH | ST gain / LT gain / Loss |

### Step 4: Asset Location Review

Optimize which assets are held in which account types:
- **Tax-deferred (IRA/401k)**: Bonds, REITs, high-turnover funds (highest tax drag)
- **Roth**: Highest expected growth assets (tax-free growth)
- **Taxable**: Tax-efficient equity (index funds, ETFs, munis), tax-loss harvesting candidates

### Step 5: Implementation

- Total trades by account
- Estimated transaction costs
- Estimated tax impact (realized gains/losses)
- Net effect on allocation drift

### Step 6: Output

- Drift analysis table
- Recommended trade list (Excel)
- Tax impact summary
- Before/after allocation comparison

## Important Notes

- Don't rebalance for rebalancing's sake — small drift within bands is fine
- Tax costs can outweigh rebalancing benefits in taxable accounts — calculate the breakeven
- Consider pending cash flows (contributions, withdrawals, RMDs) before trading
- Check for any client-specific restrictions (ESG, concentrated stock, lockups)
- Document rationale for every trade for compliance records
- Wash sale rules apply across accounts — coordinate trades across the household

---

## Why This Skill Exists

Analyze portfolio allocation drift and generate rebalancing trade recommendations across accounts. Considers tax implications, transaction costs, and wash sale rules. Triggers on "rebalance", "portfolio drift", "allocation check", "rebalancing trades", or "my portfolio is out of balance".

<!-- SR_40: auto-generated from frontmatter `purpose`/`description` (OPP-Phase3). Expand with domain-specific rationale. -->

## When to Use

Use this skill when the task requires portfolio rebalance capabilities.

<!-- SR_40: auto-generated from frontmatter `when`/`description` (OPP-Phase3). -->

## What If Fails

If this skill fails to produce the expected output: (1) verify input completeness, (2) retry with more specific context, (3) fall back to the parent workflow without this skill.

<!-- SR_40: auto-generated from frontmatter `what_if_fails` (OPP-Phase3). -->