Best way to redistribute and rebalance portfolio

brooklyn_3p3 · Joined: 17 Feb 2007 Posts: 5

The question I have is one of those "good problems" questions. When I first started investing around five years ago I made sure to carefully balance my portfolio, never having one stock make up more than 5%-10% of my entire portfolio. However, over the years as I have cut the losers and added to the my winnings many of my initial investments, such as MVL, ATVI, EBAY, SYMC, YHOO, now make up a significantly large portion of my portfolio. I have very rarely sold my winners over the years but now that these stocks make up such a large percentage of my portfolio even the smallest movements can be quite painful (especially when it is a movement down!).

My question is how is the best way to redistribute and rebalance my portfolio? When I first started investing five years ago I had around 20 stocks with equal share. Now I currently have 5 stocks which make up nearly 80% of my portfolio. I am scared to sell my winners as I don't want to lose out on more gains, but at the same time I am frightening when one of these stocks moves down quickly (such as EBAY or SYMC recently). I want to make money please tell me how is that possible. How the decision has to be taken.

hector99b6 · Joined: 23 Feb 2007 Posts: 4

Here is a good mental exercise to try--You must be honest with yourself.

Imagine that right now all your portfolio dollars are sitting in cash only. How much of that cash would you be willing to invest in each of those five stocks today? At today's price? (Be honest!)

Based on the results of this reassessment, you might want to sell off the percentage of each stock that would bring your holding down to the dollar value you'd be willing to invest today. If you've ever wanted to know how to truly make money in the stock market - without the agonizing stress and uncertainty then [name removed - no spam please] is the answer (as far as I know). Techniques like killing move and loophole in the Investment Advisor Act can enable you to bank up to double-digit returns on your investments during any given month. Just google on [name removed - no spam please] and you get the gate of success in stock Market.

BigBen · Joined: 09 Jul 2007 Posts: 4

Hi brooklyn_3p3,

it doesn't matter how many stocks you invest in. what matters most is what is the risk mitigation strategy you use? as for me, i only have 10-15 stocks under my belt but none of them is junk stocks. till now i reap between 20-30% p.a return from the stocks since the past few years. here is how i do it: http://www.stock-investment-made-easy.com/good-stock-pick.html

so, it makes no point of investing in so many stocks or 'over diversified' including the losing one as well. keep on investing in high quality stocks and sell them of should it reach your financial goal (or investing goal). that makes more sense to me.

Hopes it helps...
Wink