Jonock's Blog : Selling in Rallies is Against Our Nature

We all know to buy the dips but do we all sell the rallies?
In the current rapid markets rallies are a time for cleaning our account, evaluating our holdings and selling stock. Never buy stock in a rally if you didn't own it before the rally started you have missed the big move, with the rapid 2-3% 1 day swings, forget it. All your holding should be in place before the rally starts. During the rally you constantly evaluate each of your holdings. When a stock you own meets your predetermined exit value, pull the trigger, even if it means leaving a little on the table. Sometimes in the euphoria of a huge rally we must remind ourselves, that rallies are a chance to sell stocks, not buy them. If you do have a holding you feel has much more up side that your original exit value , recalculate and put in place a new exit value. So the tougher you are on your portfolio, the better chance you have to lock in gains when you have them. This probably goes counter to your natural instincts, but you have to act in spite of your emotions. You need to reevaluate your stocks and demand a lot more from them than you ordinarily would, unload the slow movers.