constant ratio plan business definition
A formula plan for investing in which the market value of all stocks in an investor's portfolio is kept at a predetermined percentage, with other investments making up the remainder of the portfolio. Thus, stocks must be sold if they rise in value more rapidly than other investments, and bought if they fall in value more rapidly than other investments in the portfolio. As an example, an investor may decide on a portfolio of 70% stocks and 30% bonds.
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