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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: Aussi ✭  😊 😞
Number: of 15058 
Subject: Re: OT: Diversification and portfolio size
Date: 07/09/2023 11:36 PM
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No. of Recommendations: 5
Hmm, might this not work out to a portfolio that always did a lot more "sell low" than "buy low, sell high"?
You'd also gradually have a lot less diversification as time goes on, and you'd end up holding stocks for a very long time, which isn't always good.

Using GTR1, the bottom 5 1 year return stocks have a negative return for the next 3 months and 2% return for following year. Basically cut losers, allow winners to run and reap the tax benefits.

With regard to diversification, after 5 years you have sold 100 stocks, 400 remaining. Start again by balancing out to equal for 500 stocks. There will be tax consequences for the rebalance, but previous losses should help.

When you die, your heirs will be left with the best performing stocks at a higher cost basis.


Craig
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