This is an old article from the end of 2004. Pretty simple stuff but that's the beauty of it imho.


"What investors should be doing is focusing on the action that is in front of them today. If you have winning stocks, then let them run. If you are starting to accumulate losses, then do some selling. The secret to market success, and you should tattoo this on the back of your hand so you never forget it, is portfolio or money management. Picking good stocks and making accurate predictions sure can help, but having a system in which you cut losses and take gains is the key to long-term success.

It is my strong belief that the vast majority of investors would improve their results if they simply developed some sort of strategy for selling laggard stocks in their portfolios. Unfortunately, individuals often have a very strong psychological resistance to admitting mistakes and selling losing stocks.

In addition, Wall Street strongly encourages individuals to keep putting more money into weak stocks. The phrase "buying opportunity" is a Wall Street favorite, but few realize how dangerous it is."