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When (like right now) my portfolio is at or near all time highs, and there are no bargains obviously shouting "buy" at me, other than the stocks I already own, and even some of them are starting to look very expensive, I usually:

1) Trim the expensive stocks, just a little. I will never be good enough to sell at every top, but I will use my judgement a little to trim. By trim, I mean 10 or 15% of the position. Altering positions wildly does not go well. If I think MDB is expensive and sell half or all of it...how sick would I feel if it just kept going up and I never got to buy back in? OR if it immediately got acquired at a 40% premium??? Ouch.

2) Start new positions instead of adding to my large ones that are expensive. At times when everything seems expensive, I don't want to jump in anywhere with both feet, so I usually have more small positions (I'll build the ones that stick later, on dips). I've generally held 12 to 13 positions at a time, but right now I've expanded to hold 15 or 16 (e.g. I just bought a 2% position in the recent Motley Fool Rule Breakers rec). My large positions are still large (the top 5 make up almost 50% of my portfolio), but the tail gets longer.

3) Hold a little cash. Stocks always inevitably dip, even irrationally at times. Nice to have *a little* cash to scoop them up. To me, holding more than 20% cash is trying to get too cute, but I'll hold 10% or maybe even 15% if I'm really having trouble finding a "buy." If I see something really safe I might park some cash there for a few days or weeks.

Hope this is helpful and adds to the conversation.

Bear
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