http://createwealth8888.blogspot.com/2009/11/portfolio-management-asset-allocation.html
What were you thinking on Thursday and Friday when major markets around the world tumbled? Are you terrified by the -5% drop in HSI?
One good way to overcome this Fear is to have good buffer of realized profit and use the realized profit to diversify into different sectors.
When the panic selling hits the market, some may withdraw completely from the market and stay in cash and observe the market for a while. Others may switch to more defensive counters or counters that have little or not linked directly with the cause of the panic. So when panicky investors switched into your counters; your portfolio may be spared from huge damages from the meltdown.
It is also a good time to review what are those counters that survive this melt down and you may want to include them if they are not already in your portfolio.
How to have more and more realized profit? You have to SELL.
http://createwealth8888.blogspot.com/2009/11/sell-is-not-dirty-word.html
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