No. of Recommendations: 0
I feel your anxiety. I've been Foolish for well over a decade and even though I am sold on the mantra of investing in good companies, I still worry about macro effects on the market: China, Trump doing something stupid, who-knows-what that we didn't see coming. ...So here's what I'm doing to manage my risk as my portfolio has it's best year ever (up 25% YTD:
1- I am invested in 38 stocks right now so that buys me diversity to a degree, and it's really all I can do to keep up with news on them and have a sense of whether I want to remain invested. All are recommendations from MF services, mostly MDP, SA and RB.
2- I don't let any position grow to more than 6% of my portfolio; I monitor this monthly and sell as needed. I know I've missed some spectacular gains (NVDA springs to mind, where I have sold off shares repeatedly), but I don't want the anxiety of losing everything due to some calamity.
3- I track buys and sells on all my positions on a spreadsheet and calculate both realized and unrealized gains/losses monthly. On the sheet, I look at what % of my gains are unrealized and and have set flags at 50% and 70% unrealized in line with my personal risk tolerance. I also look at the dollar amount of unrealized gains, and have set a trigger of $15k. When the 70% and $15k triggers are reached, I sell to get back under those amounts to protect my gains. Yes I lose upside, but I sleep better when the market takes a dive.
4- I keep a certain amount of cash on hand so as to a) limit my losses in a downturn, and b) allow me to get back in if the market reversal is short and I see good values in shares I already own or I have an opportunity to buy new positions.
5- I don't fret too much about losses unless MF is advising selling or I have lost faith in the company/industry, and endeavor to hold for the five year bogey that MF aspires to. Having said that, I have sold a number of my positions out well before the 5 years for the reasons I stated.
6- I have kept track of my total trades each year: new buys, adds to positions, sell all and reduce exposure. Doing this helps me make sure I am not trading too much and helps me keep a longer term perspective and be more "Foolish" in thinking about why I am buying or selling.
7- I focus most of my energy on my top 15 positions and monthly, I calculate what % those are of my total portfolio. This helps limit my exposure to a few stocks causing excessive volatility in my total portfolio. When I started tracking this %, I was in the high 70's and got up over 80%. Now I run closer to the middle 50's.
8- I use the S&P as my benchmark, and endeavor to beat that over time, so I monitor both the gains for each holding as well as how it is dong vs. the S&P and I track all shares than exceed 10% better than the S&P and look to see that # grow over time. I currently have 20 of 38 positions 10% or better than the S&P, which is up significantly from when I began monitoring this indicator.

Kind of a long post, but I have evolved all of this as a way to keep calm during turbulent markets and keep more of my gains.
Hope this helps!
Rich
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