"...are you really bettter off not trying to rebalance your portfolio just because shares in one company or industry have appreciated. should you sell more of your winners to fund more purchases of your losers?"
Yes, not much analysis I've found on this. I was shocked to read Charlie Munger say something like, "Yes, I know Costco's stock is overvalued, but I'm not intending to sell any share at any time. Well he was a company director, so maybe he felt he should hold all, but I believe he would sell some anyway if business took some real impairment. And too, at age 99. not much difference looking out long-term as to whether he sold or held.
His example resonates with me though, because for example I've trimmed full position in AAPL, and regret having done that.
One thing though, if I trim a good-size winner, the funds would not likely be going into more purchases of losers. I prefer to put the proceeds into different stocks where at the moment the opportunities seem good. I might add to my losers, but not with proceeds from my winners. |
