The "Stock Trading Riches" Investment System

[PraveenP]

Here are my returns for the last 5 years vs. the S&P 500:

Year, Me, S&P 500

2005, +13%, +4.91%

2006, +14%, +15.79%

2007, +22%, +5.49%

2008, -40%, -38.49%

2009, +44%, +23.5%

My portfolio thus had a cumulative five-year return of +35.79% vs. a loss of 2.66% for the S&P500.

I'm especially happy with how constant value rebalancing helped my portfolio bounce back from 2008.

At the end of 2008, I added cash to my account, but still did not have enough to fully rebalance every position. So, I had to implement the triage rule mentioned in my book, and I sold off a few positions to rebalance the others.

My testing had indicated that, after a drop, your portfolio recovers better with fewer, fully rebalanced positions, then having several unbalanced positions.