When is it common for investors to realize a drifting asset mix?

A drifting asset mix occurs when the composition of a portfolio shifts from its intended allocation due to the varying performance of its underlying assets, leading to a situation where the actual exposure deviates from the target.

Investors employing a buy and hold strategy typically do not engage in frequent rebalancing, which is the process of realigning the proportions of assets in a portfolio back to their desired weights. Since the assets are held over the long term and not actively traded, their market values can rise and fall relative to one another. This can lead to a scenario where the asset mix gradually "drifts" away from the intended allocation as some assets appreciate more than others.

In contrast, active trading involves frequent buying and selling, which often requires constant adjustments to maintain a specific asset allocation. Investors who frequently rebalance are proactively managing their asset mix, thereby avoiding the drifting that occurs with a buy and hold strategy. Similarly, following market predictions might lead investors to adjust their allocations based on anticipated market movements, which does not contribute to a drifting mix but rather to an active management approach.

Thus, the nature of a buy and hold strategy, characterized by its passive management style, makes it common for investors to experience a drifting asset mix.