@LarryWink I am sure the same people will come back and say how largecaps have saturated and we should shift focus to midcaps and smallcaps.
With the type of nimble rebalancing that we follow, we will book our losses quickly and shift to the more stronger stocks in the index. With the standard deviation factor that I use, some of the stocks showing big changes are avoided.
I have told myself not to apply my mind to any decision; just follow the system. I have the comfort of holding the strongest stocks in the index at all points of time. If the index chosen itself is wrong, then nothing can be done. I have also tried to distribute the risk by investing in 20 stocks from smallcap index and 25 from Microcap. If someone wants to reduce the risk even further, the best way is to increase the number of stocks. I know of one smallcase manager offering 50 stocks in a smallcap index.
I am certain I will come out making more money in the long run.
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