Sometimes You Bend Your Trading Rules...

I usually am a staunch believer in following your trading system.

Since I follow the basic Stock Trading Riches system, I only re-balance each stock position once a year.

Today, however, I did a re-balance. I will still do the regular re-balance at the end of the year for any positions that move at least 10% by then.

I decided to do the extra re-balance because, after experiencing my first losing year in 2008, my portfolio is now up 27% so far in 2009. I felt uncomfortable keeping that much of an open profit in this volatile market.

The only downside would be if the market keeps climbing this year - in that case, any additional gains will be less than if I hadn't re-balanced. For example, if the market climbs another 5% from here, I might only make an additional 3%. But, since +27% is excellent for a year, I don't mind.