pyad wrote:Arborbridge wrote:
Thanks for the clarification, I hadn't noticed that point. It does beg the same question as with capital weightings of individual shares: if balance is important at the beginning why isn't it important to maintain that balance? Or if the balance can be allowed to wander over time, why is it important in the beginning? The portfolio does not "know" what time it is: year 1 or year 10.
Arb.
The only logical construction approach at the start is equal sectors because the HYPer has no idea which sectors will develop over eternity to produce the better or worse income streams. So no sector should be preferred.
After that as you probably know, my advice is to permit what I've termed "Market Trading" to operate. This means no tinkering and instead allowing the market to do what it will with the portfolio by way of price fluctuations and corporate events such as bids, demergers etc. My view is that MT will serve an HYP much better over the long term than most HYPers will achieve by tinkering.
Most HYPers have no skill, none, and more likely negative skill by which I mean that by tinkering, they will actually harm their portfolios rather than enhance them. The problem is, as with a lot small investor approaches and not just HYPers, accepting their ignorance. Quite hard to do for many people. It's like saying you're a bad driver or lousy at sex. A lot of people, but overwhelmingly men in my lengthy experience with private investors, feel they have something to prove and have great difficulty in doing nothing even though that's nearly always the best course in time.
Women in the main don't suffer from this mentality and will frequently prove far better HYPers than blokes, simply because they are far more able to do nothing.
So my advice to most of the men round here is either learn to control your feelings that you have to do something and that something good will flow from that, when mostly it won't, or cut your balls off. A marginally radical approach perhaps but it'll do your HYP a world of good.
This is all first principles HYP 101 stuff which I'm sure I've said before Arb and you've been around a long time but perhaps it was on my own site rather than TMF/TLF.
Sorry, my comments are above. I was interrupted in mid composition by a phone call, and then led astray.
TJH