Subject: Re: Morning Musings
Each month until retirement do the following three steps:
* If you own a stock that has been outside the Nasdaq 100 index set for a full year, sell it.
* If you have more than about 60 stocks, trim back any position that gets over 4% of the portfolio. That's what I would consider the absolute limit for capital allocation to a single firm by someone who doesn't know how to assess single firms. Then:
* Take this month's savings plus any cash in the portfolio from sales or dividends, and put it all into a single randomly selected (NOT hand picked) stock that has been in the Nasdaq 100 for at least a year, that you don't already own. If there aren't any because you own them all, buy more of the one you own the least of.

Health warning: Free advice is not guaranteed not to be overpriced.


That's like giving a teetotaler advice on how to quit alcohol.
Or giving a sports aficionado advice on picking a fantasy sports team.

The people who are not interested in doing all that work won't do it.
The people who are interested in doing all that work are basically already doing the work.

The people are the targets for this suggestion would be better off simply buying a broad market index fund. VTI or whatever. I can't imagine them pouring over the Nasdaq 100 every month or once a year.

Ex: I managed my sister-in-law's IRA account for many years. A few years ago I moved it all into VTSAX and turned it over to her, with (simple) recommendations. She has not touched it except for taking annual withdrawals.


trim back any position that gets over 4% of the portfolio. That's what I would consider the absolute limit for capital allocation to a single firm by someone who doesn't know how to assess single firms.

I have more than 60 stocks and 5 of them are over 4%. They all have very large unrealized gains and I'd pay a large tax to sell them down.

I would submit that, aside from somebody who got screwed by a full-service broker loading them up with flavor-of-the-week stocks, people who had that many stocks has a decent level of knowing how to assess stocks.