Too many people talk about making a buy list. It’s rare that you hear anyone saying to prepare a list of stocks you’d like to sell. My opinion has always been that you should keep two lists with you at all times. The volatility of these markets should have taught all of us that lesson but I am not getting the feeling that is the case. It’s way too easy to complain about how bad things are and then sound optimistic by advising people to put a buy list together. I am telling you that it’s time to figure out what you want to buy. AND I am telling you that it’s precisely the time to figure out what to sell out of your portfolio.

In my opinion, one of the key components of effective portfolio management comes from learning how to maintain both lists. Doing that successfully is a reflection of flexibility, keeping an open mind, managing trading biases, being able to admit when you are wrong and a bunch of other psychological traits that will contribute to gains and help avoiding losses. It is critical that you do not get hung up spending all your time thinking about what to buy. It should not be the case that you only look to sell something to raise cash for a new position you want to add. And when you sell something proactively, you should already have a few names that have already been fully analyzed to fit with your investment criteria.

I am frequently told that I am too bearish and other times I am told that I am too neutral on the market. Rarely do I ever get criticism when I am bullish like I have been 53% of the weeks since HEDGEfolios showed up on the Internet in January 2005. Funny how perception of my negativity is not proven by the facts. The point is that I always have both lists working on a giant scale. Right now - about 50% of all the approximately 3500 stocks I cover have UP signals - the other half is DOWN. One of the biggest reasons that HEDGEfolios has consistently outperformed comes from always balancing my willingness and readiness to sell with my willingness and readiness to buy. How about you?  How much time do you spend analyzing stocks you might want to buy?  How much time do you spend analyzing what to sell and why you want to sell?  Please make 2 lists.