Dear Harry: At the end of every year, I am bombarded by those who say that you should rebalance your portfolio at least once a year. In the past five years, I have made a few tests of my own on this advice and have found (among other things) that it would have led me to have a loss on my investment portfolio where I actually had a very decent gain. I find that many mutual-fund managers seem to agree with me. My friends who rebalance all say that I must be wrong, because the advice comes from virtually every decent-size brokerage and many respected financial advisers. Why is my experience so different? Is it because of the financial meltdown of Bush's final year?

What Harry says: It is interesting that the rebalancing advice often goes contrary to the advice to sell your losers and retain your winners. We have to keep in mind that the winners will always increase their percentage of the total investments as they increase in value and the laggards either drop in value or remain level. For example, assume we start with a portfolio of $100,000 that has stocks in companies A, B, C and D in equal amounts of $25,000. Now D doubles in value to $50,000 and the others remain equal. D's percentage will rise from 25 percent to 40 percent. It's apparent that rebalancing will cause you to sell some of D and increase the investment in the others. There also will be a tax hit on the sale. I have a friend whose investment in Berkshire Hathaway started at 5 percent of his investments and is now 25 percent. He's still holding it, and says he would sell it only with a gun at his head!

Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood: Contact the American Red Cross at 800-Red Cross.