Not true. Most home runs in stocks in the long run(12+years) have had 50% retracements in their history.
Really depends on market cycle, every 6-12 years markets make huge plunge like 2008, so 2009 is buying opportunity, it would be foolish to sell half of a position cause you want "free profits". Whereas deeper in overall trend of handful of years, taking off half position might test logically to do. Also have to consider what you lose on half cause of missed dividends and selling covered call options.
It means exactly that. You are supposed to be a passive investor in that strategy not a trader. The only action is reinvesting of dividends, if there are any.
He doesn't want to admit that he is a passive investor. He wants to pretend that he a kick ass wheeler dealer in stocks.
By doing that you are saying you believe it will continue higher. If so, then why sell half? Selling half says to me you are only half sure. Which if it were me would be the reason to sell all. And rethink current market conditions and possibly go short. What blasphemy on this site. So yes IMO house money is a fallacy.
%% MADE $$5.oo----------- less comissions if applies\SEC fee----- power co electric fee..................................... BUT i may keep it if all my ETFs pullback more than that..................................................................... Even more important, crpto cr*p\bit con is not near stock/ETFS @ all. I dont care if W Buffet calls them ''rat posion''; there is a small sellers market for ratraps/gluetraps........................................... Frankly i would not trade/invest @ all if i though markets were the ''house''LOL; or pretended a glue trap\rat trap. were an ''investments/trades''
The basic flaw in this reasoning is that you let your second investment decision depend on the outcome of the first one, while they should be treated as two seperate independent investments (or trades). From a psychological viewpoint it is understandable. Keep in mind that it is totally different from putting extra money in a position which goes against you, which is valid only IF your original idea is valid. The danger is ofcourse in recognizing if the original investment idea is the same, or your viewpoint is blurred by your own psychology. It is like the economic theory of 'sunk costs', when people have already spend money on something it seems wise to spend more on it.