Re: Xot: Hypothetical question (anyone can answer)
Not sure i understand your question, Doc.
But if you're asking about rebalancing or allocating, i don't do either. Don't think in those terms about my investments. Actually makes my eyes glaze over to read about those types of issues. It's dogmatic to me......but i understand the theoretical reasoning for each.
When i sell something, it's nearly always matched with a concurrent buy. And the reasons for buying or selling will have nothing to do with percentages, rebalancing, or allocating. I'll be trying to increase yield, gain discount or lower pricing, improve quality, diversify, increase time to call or gain call protection through other means, and book profits if applicable. And this reasoning applies to my non-pfd holdings as well. I trade them around as necessary always looking for a better deal in whatever form the deal may be...higher yield or possible gain, perhaps the chance of dividend growth, to take advantage of unreasonable market sell-offs, etc.
I know you frequent the M* boards. Discussion of allocation and rebalancing are frequent there. However, I have found no use or application for the concepts as regards my own investment goals. Posters talk of allocating to this or that as if it were the silver bullet. Simply allocate funds among the recommended sectors in the recommended percentages and voila'....stock market success. Sell this when it exceeds X percentage and buy that when it falls below Y percentage. The idea here is that rebalancing forces selling high and buying low. Perhaps, but i'll buy high and sell low voluntarily, no need to resort to a systemization that may or may not meet some theoretical objective.
Bottom line, i may do anything with new or recycled funds.......................................Xot |
