Key insights
- The user questions the conventional advice of rebalancing a portfolio, particularly when certain stocks have significantly outperformed. The user is concerned that rebalancing might involve selling winners and buying losers, which contradicts the strategy of letting winners run. The question highlights the tension between maintaining a target asset allocation and capitalizing on successful investments. This could lead to underperformance if strictly adhered to, but also reduces risk.
I was reading on portfolio management. My portfolio has 10 tickers let's say two of them have grown by 50% and 2 went down by 20% . If I use pies e.g in trading 212 and set rebalance it would not put more money in my runners because I set it as 10% cap of my portfolio rather full my losers or even sell my winners to losers . That doesn't make much sense to me but that's the general advise I've been reading online.
What's your take on it? Let your winners run even if the original was 10% and now it's 15% ? Or rebalance on every DCA