Eileen's picks

Be true to yourself

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Yesterday I had the pleasure of introducing a number of new members to our congregation. One said the most important thing in her life is being true to herself. Another said what motivated him to join is that everyone he had met so far acted on their principles.

Today as RIO went through the roof again, I realized I was not being true to myself, not acting on my principles. My investing system says, or rather dictates, that when an asset category other than cash goes more than 10% over plan, it must be sold down.

Yet for the last week I've allowed foreign stock values to climb to more than 20% over the plan for that category, kidding myself into thinking it was "okay" because I technically didn't have to rebalance until the end of the month.

But the reason I have a system - a system that has worked very well for me and my family's trust over the last four years - is to make sure that gains are captured (before they have a chance to disappear) and placed in cash or in an asset category that's low.

So today I sold $60,000 of RIO and put the money in cash.

I have a plan in place in case the market drops through profit taking or because of a rumor or a bad report. At the end of the month, I'll review everything again as I did last month and modify the plan if necessary.

Now my conscience is clear: I'm being true to myself, acting on my investing principles.