Portfolio · Investing Glossary
What Is Portfolio Drift?
When a portfolio's actual allocation moves away from its intended target due to market movements.
The Full Definition
Portfolio drift happens when different holdings grow at different rates, pulling your actual allocation away from your intended target without you doing anything. A portfolio that starts at 80% stocks and 20% bonds can drift to 88/12 after a strong year for stocks — quietly taking on more risk than originally planned. Drift is the reason rebalancing exists: left unchecked, your winners keep growing as a share of the portfolio, which is exactly how concentration risk builds up over time.
Real-World Example
An investor who set a 70/30 stock-bond split five years ago and never rebalanced might find their portfolio is now 85/15 simply because stocks outperformed bonds — drift that happened passively, not by choice.
Related Terms
- RebalancingRestoring your portfolio to its target allocation after market movements.
- Asset AllocationHow you divide your portfolio across stocks, bonds, cash, and other assets.
- Concentration RiskThe added risk of having too much of a portfolio invested in a single stock, sector, or asset.
- DiversificationSpreading investments across different assets to reduce overall risk.