Let's say you have a porfolio of 25 stocks and you give them each an equal weight so each stock is 4%. Obviously after a while, stocks that do well will obtain a bigger weight in your port and others which underperform will get a smaller weight.
Does it make sense to rebalance all those stocks once or twice a year, so selling a bit of the stocks that have done the best and buying those who underperformed so all go back to each having a weight of 4% in your portfolio.
On the other hand, you may want your good stocks to keep running (momentum) and maybe cut lose stocks you no longer believe in for example if their fundametals change, so how do you than apply sensible rebalancing of your stocks?
Hope some here can give some good advice. Thanks in advance.
Submitted August 31, 2019 at 08:53PM by ThinkBigger01 https://ift.tt/2LbJrjy
