Unit 4 · Level 4 · Staying the course
The annual review ritual
A serious portfolio needs about one hour of attention per year. Check four things: has your allocation drifted from target? Have your funds' fees crept up (or cheaper clones appeared)? Can you raise the monthly contribution? Has your LIFE changed? Everything else (daily prices, forecasts, your neighbour's returns) is deliberately ignored. The ritual matters precisely because it's rare.
Free to play. No ads, no token, no account needed to start.
What you get asked
Match each review item to why it earns a place on the checklist
Three checks and one deliberate ignore. The contribution rate deserves special love: it's the only number on the list that obeys you.
Review day: your €100,000 portfolio targets 60/40 stocks/bonds but has drifted to 70/30. How many euros of stocks do you sell (to buy bonds) to restore 60/40?
Stocks sit at €70,000 but should be €60,000, so sell €10,000 of stocks and buy bonds. Ten minutes of maths, and your risk is back where you chose it.
Rebalancing means selling some of what just rallied to buy what just lagged. Why do it, when it feels so wrong?
The goal is risk control; the buy-low-sell-high discipline comes free. (Some years it costs return, and that's fine; it was never a return machine.)
Ritual frequency: a full portfolio review once a ___ is plenty for a long-term plan.
More frequent checking mostly manufactures reasons to fiddle, and Unit 1 priced what fiddling costs. Put a date in the calendar and close the app.
During your annual hour, markets are down 12% for the year. Which review response is correct?
Down years are when the ritual earns its keep: drift says buy the laggard, the plan says stay. Same checklist, any weather. 🐜
The rest of this unit
Rules for storms, rituals for calm: how graduates behave for decades.