A.I.M. Users Bulletin Board

[Qarel]

karw: Then Lichello suggests to ReBal your portfolio having approximately 50% of your portfolio in quality stocks.

But that isn't the same as rebalancing! Lichello is here in a Q&A section, and the question was: "How can we keep the dollar amounts equally invested when we have more than one stock in the portfolio?" Now that is the idea of rebalancing, and Lichello answers: "It really isn't important." He continues by saying that he may have suggested it, but that the questioner probably refers to his idea of keeping 50% of your portfolio in blue chip/quality stocks. That 50% is not written in stone; it could be 60% or 70% if you like [L doesn't mention 40%...]. But Lichello likes real quality stocks, because they won't go down the drain easily. Again, if anything, he encourages us to ignore rebalancing!

The only 'rebalancing' I see here is when the other part of your portfolio outgrows the blue chip part: Lichello might have applauded shifting part of it to the blue chip part. But never the opposite way! So it is not true rebalancing, after all.

Regards,

Karel