Posted by stormspike > 2019-07-26 13:59 | Report Abuse

I have this burning question regarding the art of rebalancing of share portfolio. Some gurus suggested that we sell the loser shares and buy the winner shares. Theoretically, it makes sense. That is what I have been practicing. Bite the bullet and sell the loser and reinvest it into the already winning shares. While other gurus suggested that we top up our investment when the counter has risen by 10%, sell out if it has dropped by 10%. Theoretically, it also makes sense. I can't say I follow it very strictly, sometimes the price is so volatile that I could not react at exactly 10%. It also depends on my available funds for investment. Some gurus suggested that we lock in our gain by selling our winners and pick other value counters in hope that it will rebound like those winners that we once held. Honestly, I didn't really buy into that idea. Once in a while, I do sell my winners. But I have a burning question. After several years of following such rules. I realised that there are 2 shares in my portfolio, occupying some 30+% and 20% respectively of my overall portfolio holding. These shares have multiplied leap and bound from the initial price that I have bought. And I kept adding to them along the way. Averaging up the price that I have bought them. And the problem now has become quite serious, any movement, say 2% in either direction would very seriously distort my overall portfolio. I felt I need to divest a bit so that the overall portfolio does not depend too heavily on these two winning shares. Those season investors, do you then sell your top performers and redistribute the weighting to the less performing shares? How do you do it?