Re: Rebalance 401k Investments?

Douglas Johnson wrote:

> 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.

That does seem to be my situation. My employer's 401k committee decided
that a certain Putnam investment would no longer be available to us. The
automatic rollover was to an Alliance Bernstein investment.

The Putnam investment had done well for me. In 2006 it make a nearly 20%
return on my money, which obviously I was very happy with. But the
Alliance Bernstein underperformed and lost a lot of money even before the
market fell. It lost money well before my other investments that were in
the same risk category.

-- 
Tony Sivori

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