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<<...there is an element of luck in your personal returns...>>

At least in the short term. In the long term, I would guess it would average out.

It's highly possible to have a few "lucky" or "unlucky" years in a row when your strategy is to just buy a small batch of stocks for a year and forget about them. That's why frequent rebalancing can add stability, just like a broad portfolio. The more rebalances, the less likely one is to have "bad luck". It's unfortunate that the IRS can't appreciate that point of view; so for annual portfolios, our only hedge against bad luck is owning more than just a few stocks.
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