portfolios and rebalancing, page-9

Lionel
Balancing the overall risk of your portfolio is very important.
If life was easier we would all put all our cash into one great stock we knew would outperform (and leverage to the hilt as well). But we don't ever know for sure, we just try and predict the likely winners.
If you are too heavily into one speculative stock like TIS it could make you but it could also break you. You can't know which til it is too late and you don't want your balls regularly on the line.
Investors all have to deal with this issue. If a trade wins, hindsight says your position should have been larger, and if it loses, you shouldn't have traded at all. It can't ever be perfect cause hindsight could always do it better!
Your discipline will serve you well long term.

Personally I think of my basic super fund as a core market holding, and add risk through picking/trading stocks with my other cash. My super is the long term buy and hold. The rest of what I do is certainly not that.

Hopesprings