Re: Rebalance 401k Investments?

Tony Sivori <TonySivori@[EMAIL PROTECTED]
> wrote:

>The administrators of my 401k plan recommend frequent rebalancing
>(equalizing all balances) of my chosen investments.
>
>This seems counter intuitive to me. Isn't it just throwing good money
>after bad, to transfer money from successful stock to a losing one?

It is a little bit, if you assume that the things that are successful will
continue to be successful and the things that are losing will continue to
be
losing.  

In fact, that's not true, at least for broad asset classes.  Yesterday's
winners
tend to be tomorrow's losers and vise versa.   How many times have I
written
"buy low and sell high" this week?  Rebalancing is another version of it.

-- Doug

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