A. There are two general methods when it comes to rebalancing a portfolio -
a. On A Calendar Basis
When you start your portfolio, you have an assigned percentage to each component in your portfolio. At one or more points of time in a calendar year, you look at your portfolio and readjust them to bring the percentages back to your original target. This is a lazy-portfolio approach and you don't create a lot of work for yourself.
b. On A Percentage Basis
Again, you have a predetermined percentage for each component in your portfolio, during any time of the year, if you see a component's percentage rises above or dips below a pre-determined percentage, for example, 5%, you adjust that component by bringing it back to your initial goal. This is a more dynamic process and needs more attention all the time.