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Title: Rebalancing Porrtfolios Post by: Huss on January 02, 2008, 04:05:28 PM I have noticed that when new weights are generated by stock increses/decreases it changes the "portfoliio" balance. How often should one use these figures to sell a gainer to rebalance?
Thanks, a newbie H Title: Re: Rebalancing Porrtfolios Post by: Super Stock Picker on January 08, 2008, 07:06:42 PM Hello Huss,
Indeed, the weights in a portfolio are always modified by the performances of each stock not being the same. Even if you take a equal dollar averaged portfolio, at the end of a period, it is certainly not equally weighted anymore if the stocks have not shown the same return. In our case, we use the performance of the recommendation to weight the stock in our portfolios. In order to keep your portfolio balanced exactly the same as our models, you would need to reallocate your positions each time the portfolio is modified by a buy or a sell, not more than that. |