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Fewer than half of all Americans have a sense of humor. This is common knowledge in the advertising industry and explains why relatively few ads attempt to be humorous. Then there's this column.

A little humor to enliven otherwise dry subject matter can get at least half of us through the tedium of topics such as the annual portfolio rebalance.

My approach to money management has been to spread funds across a spectrum of mutual funds to achieve diversification. I periodically sell some of the winners to add to what have been the losers.

Picture a graph with interlocking figure eights marching up the page from left to right.

These figure eights represent the relative performance of the different funds we own in our retirement plans. Then, draw a straight line up the middle.

We call that line "the path of minimum regret," and it defines the overall performance or composite result of our entire portfolio. Anytime we create results approaching a straight line, we have reduced our risk.

So what has happened in the past 10 years or so? In the 1990s, small companies, and the mutual funds that bought them, were expected to beat the markets following the recession of the early '90s.

Instead, it took about eight years for them to take hold and substantially beat the rest of the market. Those of us rebalancing through the '90s were pulling a few dollars out of our large cap growth funds that were up, in some cases, 60 percent a year, and putting them into small cap funds such as Van Kampen Comstock, which was up zero in 1999. REIT funds were also laggards in the '90s but made a huge comeback in 2000.

A gentle nudging of fund money helps to ease the downdraft of the market. The combination of systematically pulling some chips off the table during the dot-com boom, and allocating the money into fund types that became huge winners beginning in 2000, reduced the loss of a balanced portfolio to only a 15 percent loss.

Meanwhile, the total stock market dropped more than 30 percent, and we don't have to be reminded of what tech funds lost.

Having at least something doing well at any given time helps us feel more confident about investing. Maybe we're not so dumb after all. Most of us can live with an occasional 15 percent loss as the price we pay for the long-term returns of the market.

Just when we think of all the reasons why some asset class has got to be the next winner, the market will find ways to humiliate us.

Relax -- while the next "big thing" may be large dividend-paying stocks, REITs and small caps ended the year with another string of victories. So, these things take time. Longer cycles just give us more time to take some money off the table from our winners and buy into our (relative) losers.

I can't resist trying to second-guess what might happen next, so there is some element of judgment that I bring to my own rebalancing. After all, investing should be fun.

If I think an investment type, like a large-cap foreign fund might do a little better, I just can't help myself. I might bump it from a mechanical 20 percent to a "judgment-induced" 25 percent of my retirement account. What's important is that I'm not tempted to move even more money into last year's winner - my REIT fund.

Rebalancing our own selection of high quality funds should generate far better results than the so-called "life-style" funds that are typically just a combination of a bond and a 500 index fund.

The do-it-yourself approach statistically beats paying someone 1 percent per year to tell you what to do. In the next few weeks, we should all be tapping away at our computers to adjust our online accounts.

By the time retirement rolls around, the half of us with a sense of humor will be laughing all the way to the bank.