115 - How to rebalance a concentrated portfolio

The DIY Investing Podcast

Mental Models discussed in this podcast:

• Occam's Razor

Please review and rate the podcast

If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.

Follow me on Twitter and YouTube

Twitter Handle: @TreyHenninger

YouTube Channel: DIY Investing

Support the Podcast on Patreon

This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron.

Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode115

Key Rebalancing Principles I use in my portfolio

• Occam's Razor - Keep it Simple
• Rank every position in your portfolio
• Price Matters
• Default to Inactivity - Don't make your portfolio worse by taking action

Summary:

Rebalancing a portfolio should be based on four key principles: Occam's Razor, rank every position in your portfolio, price matters, and default to inactivity. Too often rebalancing makes a portfolio worse by taking action.

Investors should be wary of using set rebalancing rules based on time or set portfolio allocation percentages. Anytime you rebalance your portfolio while ignoring price and valuation, you may be making a mistake.