Tax-loss harvesting reduces taxes once.
Rebalancing can help protect your long-term wealth.
Over time, markets move and your portfolio drifts. For example, in 2023, NVIDIA was only around 2% of the S&P 500. Today, it's over 7%. Tech was around 27% and today it's over 34%.
Without realizing it, you may be taking more (or less) risk than you intended.
Rebalancing can:
- Prevent unintended risk exposure
- Reduce the chance of steep losses during downturns
- Improve risk-adjusted returns over the long run
- Reinforce disciplined investing behavior
A portfolio consisting of 60% stocks and 40% bonds drifting with natural movements in the market to 70/30 means you’re suddenly more aggressive—without choosing to be.
How to rebalance
- Use tax-advantaged accounts first (IRAs, 401(k)s)
- Use tax-loss harvesting in taxable accounts to offset any gains
- Rebalance back to your target allocation
These are general guidelines. Everyone's portfolio is different.
Mezzi automates the analysis. All you have to do is make the trades.
What to do today
First, Personalize your Mezzi AI.
This is super important. I can't emphasize this enough. AI needs to know about you to work well.
Write in your target allocation. For example, let’s say you are at 70% Equity and 30% Cash but want to be at 80% Equity and 20% Cash, just write that in.
Then, ask Mezzi:
- What’s my current allocation across all accounts?
- Help me get to my target allocation while minimize taxes
- Show my current vs target allocation across all accounts.
- What trades should I make to rebalance tax-efficiently?
Be wealthy,
Manish
Co-founder and CEO of Mezzi
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