This law involves deciding what percentage of your total portfolio you will place at each level of the pyramid. Then you periodically review your actual percentages, and reallocate as necessary to return your pyramid to balance.

For example, from January to July the stock market experiences incredible growth. Your aggressive and controlled areas grow:

In July, you reallocate back to their original levels, taking your profits and building your war chest. The market sinks dramatically in October, and your aggressive and controlled areas shrink back:

In December, you have a larger percentage in your foundation. You can now take advantage of post-crash bargains in the controlled and aggressive areas of the market as you reallocate your percentages back to their original settings.

What’s next? You try to seek consistent positive returns >>>