Direct answer
How do you measure portfolio drift?
For each holding, take its market value, divide by total invested value, and compare with its target percentage. Add up the absolute differences to get a drift score in percentage points. The bigger the score, the further the portfolio has moved from the plan.
The simple math
Current weight = position market value ÷ total invested value. Drift per position = target weight − current weight. A drift score adds the absolute values of all positions so small offsets do not cancel out.
- Current weight: what you hold today
- Target weight: what you planned to hold
- Drift: the difference between the two
- Score: the total distance from target
What the number means
A score near zero means the portfolio is close to plan. A score of a few percentage points is normal after a few weeks of markets. Large scores usually come from one or two positions moving a lot.
When drift deserves action
There is no universal trigger. A common rule is to review when any position is more than a few percentage points from target, or when the total score crosses a threshold that fits your plan.
Limits
- Drift is about weights, not returns.
- Cash and fees change the math and must be included.
- A low drift score does not mean the portfolio is a good fit for you.
Common questions
Questions about this workflow
What is a normal drift score?
It depends on the portfolio and how long it has been since the last rebalance. For a 20-position portfolio, a few percentage points of total drift is common; large one-way moves push it higher.
Should I rebalance whenever drift appears?
Not necessarily. Small drift is expected. Rebalance on your chosen schedule or when drift crosses the threshold you set, rather than reacting to every day.