A long term portfolio has to be necessarily long term. That means you don’t keep jumping in and out of stocks on a continuous basis. Why do we ask you to avoid getting in and out of stocks too often? Your core portfolio should change only if you perceive a serious change in the fortunes of the company due to some emerging trend that is likely to disrupt the performance of the company. Either the macros must be shifting or there must be some major shift in the industry or a major shift in the company in question. Alternatively, a very salivating opportunity of buying another stock may have arisen. The bottom line is that any change in the portfolio should be justifiable. When you overtrade you need to worry about the impact cost, trading costs, regulatory costs as well as taxes. As a smart long term investor you surely wan to minimize each of these costs to the extent possible since each of these small items can compound smartly over a long time frame. It is not just about tax and cost implications. Overtrading also means that you try to aggressively outsmart the market and in the process end up on the losing side.