Here are two important things I do to set up my selling decision ahead of time and help me sleep at night... No. 1: Use trailing stops. By adding a trailing stop once I buy a stock, the decision to sell at a certain price has already been made. And it was made when I was thinking rationally and logically, not when the stock was in a free fall or when unexpected news hit the wires. I can always adjust my stops if I need to, but I never ignore my stops if they've been hit. If I did, that would be reacting emotionally. I always want my selling strategy to have been made without emotions coming into play. No. 2: Position size appropriately. Never buy so much of an investment that you can't recover if it becomes a loser. If you put too much money into any single investment, that will cause you a lot of stress. And when you're stressed, you're going to act emotionally. You may sell too soon because you just can't take it anymore. Or if the investment goes south, you'll hang on too long, praying it will come back because you can't face selling for such a massive loss. That is a recipe for disaster. While we don't want any of our positions to be losers, some definitely will be. By keeping your position sizes small, you can withstand a problem in any individual investment. The Oxford Club recommends that investors put no more than 4% of their portfolio in any single investment. You're probably sitting on some fantastic gains from 2020 and perhaps earlier. Who knows what the rest of 2021 will bring? Make sure you have an exit plan in place now so that you don't watch your gains evaporate in the event of a big downturn. Good investing, Marc P.S. I hope you'll join me - along with Alexander Green and TradeSmith CEO Keith Kaplan - for a special investing summit tomorrow at 8 p.m. ET. We'll be discussing a powerful strategy that can help you take your winners even further. It's completely free to attend - simply click here to reserve your spot. | 
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