Doc's Diamonds

You can't time the market, but being prudent is still OK.

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In stock investing, sometime you need to recognize when a good thing is just a little too much of a good thing. I have been very pleased with my portfolio performance recently, and I am sure most other "Strategy Lab Challenge" players have as well. My personal performance has been negatively impacted by one bad investment (ENT) that has limited me to a 7.3% gain as of this time. I will discuss the ENT investment in a later post, but I wanted to explain the major changes to my portfolio I am making tomorrow at the market open.

I will readily admit that I have no idea where the market will be headed over the next 4-6 weeks (or longer). However, it rarely goes straight up for very long and I feel the market has had a great recovery and a great "run" after the fall out from the credit crisis. We are "pricing in" another FED rate cut which may or may not happen. Therefore, I have decided to rebalance my portfolio at this time and take some profits. I am not closing out or even cutting in half any position even though many are close to my short-term price target. However, I am cutting some of my most profitable positions down to around or below $30,000. Most of my sells are "at the market" for tomorrow AM. I really do not like to make "at the market" trades especially when the futures are pointing down as of midnight when I right this. My feeling is that I cannot monitor the price movement from work and it is better to follow my plan and make sure the stock trades happen. If I get greedy and try to squeeze every last dollar from each trade, my overall strategy of rebalancing will be more difficult to complete.

This will provide me with more flexibility going forward and I have some ideas about where I might want to put the money to work. I will discuss that in a later post.

Doc