Investing successfully requires an investor to make many decisions. The first and foremost decision is the amount of capital available for investing, the type of asset (e.g. mutual funds, index funds (link to index fund article, stocks, gold etc.) to invest in and construct an investment portfolio. Regardless whether allocators select investment managers or individual securities, optimal position sizing is paramount to portfolio success. Small allocations to prescient investments minimize their impact while large allocations to poorly performing investments leads to underperformance. Some investors use a simplified model to construct their portfolio where an equal weight allocation is given to all investments not taking into account uncertainty regarding which investments will perform best. The portfolio is then rebalanced on a regular basis to maintain the equal-weight allocation. This equal weighted strategy benefits from simplicity and it prevents the portfolio from being over-allocated to one particular stock. However, the ......