Hormones out of control

[growing_older]

Somewhere in your original plan for the portfolio, you likely had X% for this fun account. Since it has done so well and is now bigger than it's original X%, you could treat it like any other successful investment and rebalance to your target amount. Take the excess off the table and keep playing (if you are still so interested) with the fun X% you set for yourself.

 

[kcowan]

Take the excess off the table and keep playing (if you are still so interested) with the fun X% you set for yourself.

Right, gain peace of mind from assured mediocrity!

I guess peace of mind is worth it for many of us.

Since I have been retired, I am less inclined to rebalance because I have the time to monitor and focus. Like I should somehow earn my keep through portfolio outperformance!

 

[ziggy29]

If I allotted $1000 to blow in Vegas and I won $10,000 in the process, I'd take $9000 off the table and limit my continued gambling to the original $1000. Worst case, if I lost "everything" eventually I'm still $9000 ahead.

I would approach this pretty much the same way, though if my total portfolio rose by 50% in the meantime (for example) I might be willing to raise my "gambling stake" by 50% to $1500. But most of my speculative "winnings" would come off the table and out of the speculation pool.

 

[growing_older]

Since I have been retired, I am less inclined to rebalance because I have the time to monitor and focus. Like I should somehow earn my keep through portfolio outperformance!

If that works for you, you make your own choices. For me, it sounds like another way to rationalize active management and market timing. I know I can do really well with that, until suddenly I don't. So, I don't do that anymore. Each of us picks their own path, but my choice would be sticking to the investment plan I planned on, not improvising because I hit a lucky streak. I do have contingency plans for both upside and downside surprises, so if your upside contingency plan is to increase risk and roll with it, then I wish you continued good luck.

 

[kcowan]

...so if your upside contingency plan is to increase risk and roll with it, then I wish you continued good luck.

What I consider to be the secret to my speculation is to quickly get rid of my losers. Take my lumps and get on with it. This seems to be the single characteristic that seems to distinguish me from others. I hang onto winners until it no longer makes sense to do so. Two quarters of mediocre performance is enough for me. Apple is approaching that, especially in C$.

Of course that assumes that at least some of my picks are winners. But it is not gambling. In fact, I don't gamble. Once in a while I get into a friendly game but I consider the stake to be the cost of entertainment. If I end up ahead, I thank my luck. Very different than speculating with a small part of the portfolio.