This article explains how Double handles rebalancing between different strategies within your account. It's important to understand that this is different from rebalancing within a single strategy, which is controlled by the optimization settings you choose for each index (as described in the "Index Optimization" article).
Essentially, Double monitors the overall allocation of your investments across all your strategies. We automatically trigger a rebalance between these strategies when certain conditions are met. This helps ensure your portfolio stays aligned with your overall investment goals.
Here's when we initiate a rebalance:
Significant Drift: When the actual allocation to a strategy drifts (drift is defined here) more than 5% from your target allocation, we'll rebalance to bring it back in line. This prevents any single strategy from becoming overly dominant or underrepresented in your portfolio. Note that by default wash sales are respected during these rebalances, which can prevent a portfolio from completely rebalancing towards its targets.
Elimination or Addition of a Strategy: If a strategy is completely depleted due to selling (reaching 0% allocation with remaining holdings), or if you add a new strategy to your portfolio (moving from 0% allocation upwards), we'll trigger a rebalance. This ensures that your other strategies are adjusted to accommodate the change and maintain the desired overall balance.
This automatic rebalancing process helps you maintain a diversified portfolio and ensures that your investments stay aligned with your high-level asset allocation targets. It's a key part of Double's commitment to providing a seamless and optimized investment experience.