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To: Cautious_Optimist who wrote (1253)	12/1/2010 1:04:24 AM
From: Asymmetric	Respond to of 1428

That's what the article states. . I think the statement in question: "rebalance, by selling your winners and buying more of the losers. Most people can’t bring themselves to do this, even though it improves returns over the long run." basically expresses the "Dogs of the Dow" theory. Barrons used to run tests where if you sold the top gainers in the Dow for the past year, and bought the poorest performers within the Dow...eg the "dogs", this simple act outperformed most stock pickers. - A.

To: Cautious_Optimist who wrote (1253)	12/1/2010 8:07:58 AM
From: Road Walker	Respond to of 1428

Finally, rebalance, by selling your winners and buying more of the losers. He was talking primarily about sector funds, not individual stocks. If you start out with 50% bond funds and 50% stock funds (for instance) and the mix goes to 60/40, you should buy/sell to re balance to the 50/50 target. Same with small cap/large cap, overseas/domestic. Based on the principle that broad sectors are cyclical and today's under performer will be tomorrows out performer. Investing 101.