Peter Lynch is famous for the quote “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” This captures the problem with rebalancing into stocks that have fallen to maintain stocks with a certain percentage of a portfolio. However the S&P 500 is market cap weighted so it doesn’t need to rebalance based on price changes; it only needs to rebalance based on adding (winners) and removing (losers) stocks and changes in share count. The success of the S&P 500 is a great example of the value of that quote.
Sunday, May 15, 2022
Winning bet on stocks
The S&P 500 index ETF is one of the safest bets in stock investing, and over time has an increasing likelihood of making money. However...

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Five months into 2022, the Nasdaq-100 index is down over 25%. Tech stocks have been hit the hardest, which should lead to mergers and acqui...
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One of the most profitable business models to emerge over the last ten years is the subscription cloud business. Companies no longer sell s...
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A guest on Barry Ritholz’ Masters in Business podcast started an emerging markets ETF that weights stock according to the freedom index of ...