Just to give a data point. My largest recent position was INTC which had a very good run over the past couple of years (and it's great when a run like that benefits a portfolio) and I got very uncomfortable as it became about 10% of my portfolio. All of a sudden I found myself obsessing over that position, second-guessing, etc. I finally cut it back to about 5-6% of portfolio so it wouldn't be on my mind so much. I realized I got myself into a position where I wasn't thinking clearly about INTC as an investment, but was focusing on it because of it's size. That type scenario is what I'm trying to learn to better deal with.
Jokobsberg, I feel like I should be comfortable w/ larger position sizes, but there's a disconnect between knowing what I want to do, executing it, and after executing it then not obsessing over the decision afterwards. Paul Tudor Jones (I think) in Market Wizards commented that sometimes he'd put on a long or short position just to see what it felt like to be on one side of a trade or another. That's what I'm coming up against - it feels different before and after - and size obviates this. I think I actually may become more risk averse after the position is put on than before when I'm considering it. I more easily see the downside after I'm invested with size (excess worry). I would've thought this is a common problem. I've seen research that indicates most professional money managers don't allocate enough to to their best ideas (over-diversify).
I hear ya, not sure they have completely figured that in to the economic models, a lot of us are cutting back and living more simply now that we have our families raised, especially moving to a smaller house. yes, it may be the Zurich axioms, no big deal, just some writing about concentrated investments as opposed to diversified investments. man you sound like the perfect candidate for the 60/30/10 mix hard these days at this time to put 30% in bonds, but preservation is different from making it good luck and good talking to you and good question, hope you get some more helpful replies
loyek, fwiw, I smiled at one of your posts because I also have my tomatoes growing in the back yard. If I had better space for it I'd have a big garden.
I had a very big garden on the farm, but now I live in an apartment in the city, and enjoy my little space out back even more and I enjoy my small trading account more than I dreaded trying to make a living on my large trading account hard to tell your kids, we can have new shoes if the USDA report is favorable
well, my wife and kids never knew exactly what it was I did for a living, as far as they knew, I was a "stock broker."
I appreciate your honest assessment. You described something every investor goes through. You know you should focus on relative performance yet you are influenced by dollar returns. There is no magic pill to change such thought process but ultimately you must force yourself to practice thinking in relative terms. If your investment style yields positive returns then over time you should see the excess rewards over the occasional aggravation but still if you keep on psychologically influenced by absolute returns then you really should honestly evaluate whether putting your money at risk in financial markets is possibly a suboptimal choice.
I really like your writing style and above thought process. Quite rare on this site. Organized and logical. Bravo.
It's brick by brick, my friend. Start with the amount you are comfortable with, add a few % to it each month till you get where you need to be. Work out a slow schedule with yourself that your think you can live with.