Cleaning up of equity counter porfolios
I think is good to practice the idea of re-assessing /re-adjusting our stocks portfolios from time to time .
I believe the stocks market has been going-through Ups and Downs in a very rationale way as well as ir-rationale way. Dow is again approaching the psychological level of 20000 points. Think we may be in for another selling-off that could be happening sooner or later.
STI market is still on a downtrend mode even tough we have seen some strong recovery for the past one month.It may re-attempt to re-visit the psychological 3000 points. Don't be too self-complacency . Always be prepared for the new down-fall that may come sooner or in the next 1 - 2 years time.
We buy stocks for so many reasons. Sometimes we purchased a stock counter from the tips/advice from Fund Manager/Advisers or Brokers or even friends & colleagues.Some even advice us is okay to hold 100 percent of our stocks / equities so as to secure a bigger nest-egg because stocks will eventually outperforms over a long period of time.
But when we are facing a inevitable correction/sudden crisis taken place, many will be panicking as we realise that we have too many stocks in our portfolios /investments and the loss in value - even on paper can be too painful to bear.
Is quite normal for people to sell off their shares during heavy market selling down. "People may sell their shares for the wrong reasons and at the wrong timing."
The usual advice we know is always to stay on the course and ride out the market volatilities.
But we are Human and is always subject to have emotions and especially true in a bear markets , fear can make us panic and sell our shares at a loss.
For a successful investor , successful investing requires a lot of patience as well as coming to grips with both the emotions as well as emotions of others.
For people who wants to have a peaceful mind and sleeping soundly at night , it would be good to spare a moment to re-assess/re-adjust our stocks porfolios , as the STI markets has re-gained its poise after last few months of selling off.
We should again going through the rationale of buying stocks and if we are unable to satisfy our own reason, it may be better off selling it. Overall, if a stock counter had been under-performed in a Bull market, what is the likelihood of it performing well in a Bearish market.
Sometimes you may be finding yourself in a dilemma stage of selling the shares of a certain stock counter in one go - even if it is no longer relevant . In such a situation it might be a good options to sell half of your holdings first. This might help an investor to overcome the psychological effects of having to decide whether to hold or to sell it off completely.
In freeing up our cash for selling half of our holdings, it give us the opportunity to invest on a much better performing stocks. It is also a good way to prevent us from doing something ir-rationale or silly if the share prices were to drop further ..
(trade/invest base on your own decision )
