Archive for January, 2010
Real-Time Demonstration of How Rebalancing Works in a Stock Portfolio
It has been a couple of months since my last post. The reason is simple, but not as simple as the holiday season!
I prepared a series of articles for this blog but my marketing people asked me to hold off publishing them. The Gaffer Wealth System, the investing system on which the articles were based, is about to go through a massive relaunch in a much expanded format.
But there is something from it I can share with you: the practice of regular rebalancing.
The model portfolio has just had its one year anniversary and it was time to take some profits and to add to stocks that had not done so well, despite the portfolio as a whole having gained 32.7% in the past year versus the S&P 500’s 23.45% gain.
People who are hooked on foreign exchange markets or day trading may thumb their noses at such results, but the system is carefully designed to be ultra-conservative and protective of capital. It is designed to build solid retirement income and not as something with which to have fun and excitement.
Also, once a portfolio is set up, it takes a full one hour each year to look after. It’s for people who want to set it and forget it instead of being tied to their computer screens day and night.
Go to http://www.sydneytremayne.com/Dec09-rebalanced.html and you will get a demonstration of rebalancing in real time.
Write to me here and I will answer questions and comments.