Asset Allocation, Re-balancing, Big Returns?

I have spent close to 20 years in the financial industry. One of the biggest fallacies is Asset Allocation with re-balancing. For those of you that aren't familiar with this system let me explain. First I am talking about mutual fund Asset Allocation. The funds are divided up into types of funds, for example aggressive stocks, conservative stocks or balances funds that contain both stocks and bonds. There are a lot more divisions than those. You could have small cap, med cap etc. When you go to your investment advisor you answer a few pages of questions and your advisor comes up with a model of how much money you should put into each fund that the computer comes up with. Each slice of the pie has to contain the same proportion of money all along the way. For instance your portfolio could have 50% of one fund, 30% of another and, finally, 20% of the last fund. There could be more than three funds. You invest your money then you are off to the races, but wait there's more. About three months down the road it's time to make sure that all the funds are in the proper proportion to each other. Let's say that the funds now are 40%,50%,10%. The then the investments with too much in them have to be sold and the investments with too little have to buy. Your money is shifted and there may be a fee for that. Here is what I perceive as a problem. If you have a fund that is performing well and it grows you are selling some of it to buy another fund that may not be performing as well. Yes you are preserving your diversification and proportions, but you are also inhibiting your returns. What I have seen is that the returns from these types of investments are anemic and unless you have a substantial amount of money you aren't going to make much. My contention is this; Spend $29.00 and get the Pro 6 System. Shoot, you probably spent that much on Big Mac's last week. Spend some time doing your homework and participate in this blog. This blog is public at the moment, but it won,t always be that way. I currently have close to a 60% annualized return on my investments and I only check it once a week. I have the freedom to go about my life. Do I need to say it? Email me NOW!

Blog Closing

This blog has been temporarily been opened to the public. I will be closing it shortly after the grand opening.