A.I.M. Users Bulletin Board

[aptus]

Hello Barry,

Logically I would think (all other things being equal) that there should be no difference between people starting an AIM account today and others starting one year ago (i.e. they should have the same PC and Cash/Equity ratio, assuming their portfolio values are equal).

However this opens a very large can of worms. Why only rebalance once a year? Why not once a month? Or once a week? Or once a day? Or once a second? Everytime the stock value changes we'd have to look at potentially rebalancing (as if we were starting with this new portfolio value at that exact instant in time).

And, of course, there would need to be a definitive set of criteria that allowed us to choose which method was "better." (We might arrive at these criteria using backtesting or some other method.)

This strikes me as being very similar to the deep diver discussion over at SI a year ago ( http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15592221 )

That one was still left unresolved and I think your point will also be unresolved. Everyone will do what they think is best for their particular situation. However from a logical point of view, what people choose to do doesn't always make Spock-logic sense.

Regards,
Mark.

http://www.automaticinvestor.com