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When in a strongly uptrending market, long only is the place to be, no doubt. Everyone feels good about their longs and the message boards fill with the traders riding the trend and who let others know about it. I get it. The "systems" seem magic and gains just accumulate. Makes for great conversations at Holiday parties. This is nothing I haven't experienced multiple times before in my investing life.
I hope to experience it one last time before I retire.
Happy New Year to David and all who put in the fine work here at MFO.
Reply to @Junkster: Re "Sell your losers and hang on to your winners ..." Yes - subject to certain constraints which you the investor impose. I call this process culling.
Cull originally meant go remove undesirable animals from a heard so as to perpetuate the best qualities through future breeding. It's also used widely in coin collecting - meaning to sort out the less valuable specimens. I'm a bit surprised the term isn't applied more often to the investment process. (Maybe we can start something here:-)
My view is perhaps a bit unorthodox. I believe it's best to stick with a core of funds that meet your investment objectives, but over time to retain the better ones and "dispatch" those that don't measure up. This approach does NOT mean selling your laggards after one or two poor years - provided there's a sound basis for their underperformance. Only over time and by becoming very familiar with the way the fund operates and how it behaves under greatly varying market conditions can an investor truly understand if the fund still complements his or her overall plan.
So --- Study the fund reports, examine the holdings and their relative weightings, and try to ascertain whether or not the manager is holding true to the mandate you handed him and has executed in accordance with that mandate. But, in the end, cull your losers and retain the winners.
Thanks for your perspectives Junkster/HY 007. Happy New Year to You & All.
Comments
I hope to experience it one last time before I retire.
Happy New Year to David and all who put in the fine work here at MFO.
Cull originally meant go remove undesirable animals from a heard so as to perpetuate the best qualities through future breeding. It's also used widely in coin collecting - meaning to sort out the less valuable specimens. I'm a bit surprised the term isn't applied more often to the investment process. (Maybe we can start something here:-)
My view is perhaps a bit unorthodox. I believe it's best to stick with a core of funds that meet your investment objectives, but over time to retain the better ones and "dispatch" those that don't measure up. This approach does NOT mean selling your laggards after one or two poor years - provided there's a sound basis for their underperformance. Only over time and by becoming very familiar with the way the fund operates and how it behaves under greatly varying market conditions can an investor truly understand if the fund still complements his or her overall plan.
So --- Study the fund reports, examine the holdings and their relative weightings, and try to ascertain whether or not the manager is holding true to the mandate you handed him and has executed in accordance with that mandate. But, in the end, cull your losers and retain the winners.
Thanks for your perspectives Junkster/HY 007. Happy New Year to You & All.