However constant rebalancing can be cost prohibitive, either discouraging the investor from engaging in rebalancing transactions or negating the benefits of such transactions. It has been demonstrated that as transaction costs, calculated on a percentage basis, increase, portfolio reallocating decreases (Rowland, 1996)
Because the Google stock is at a higher risk, it could bring higher returns. Using a CAPM calculator (Chimp), the cost of capital for Google, Inc
Investment Portfolio The beta coefficient for Google, Inc. is 1.03 using the Excel Slope function (Christensen)
03, which is still more volatile than the market and at a higher risk than the overall market. A portfolio needs to be diversified with stocks from different industries, companies of different sizes, and include different asset classes, such as bonds, cash, real estate, and other alternative investments (Little)