Just how "every dog has its day", every area of the market has its time in the lead, and how to emotionally deal.
So one thing to remember is that most returns are due to what area of the market, what box, so to speak, your fund may be in. (06:10)
Rebalancing is basically taking the areas that did well, and selling them, and putting those funds into other areas that did not do well and buying them. (06:59)
I would again not recommend somebody trying to manage individual pieces and do this rebalancing because you have to be again completely emotionless about it, you have to have the ranges set and as soon as it hits the ranges, boom, you're rebalancing. (08:57)
Quote for the episode: "Goal statement: I better understand how to view my winners and how to view my losers." (01:37)
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Accidents will happen in life so captain your ship or at least hire one!
"Yes", he replied, "the boat went past me first on its way towards you." "You were lucky it missed you. I wasn't so lucky." "Well," said the newcomer, "I saw that it might hit me so I moved out of the way." (01:51)
"Little by little, a little becomes a lot...plus compounding interest!" - paraphrasing a Tanzanian proverb
You get your first 401(k) statement that you threw a couple pebbles into and it essentially says you know, "well thanks for playing, but you still have pretty much nothing", right?...