The Fear Of Being On The Wrong Side

There is an ever-present fear of being on the wrong side of the market. This, of course, assumes one has taken a position.

The fear comes from having been wrong many times in the past (and knowing that getting on the right side of the market trend is the most critical thing you can do to increase your chances of success), and hopefully leads to a healthy respect for the market and a risk management framework that minimizes the size of ones potential mistakes.

I'm caught in the middle right now, and have a wager either side. I have a healthy cash position should the market experience a retracement (which I am looking for), but maintain a reasonable equity exposure should the market chose to continue moving higher. With a significant lead over my benchmark, I am afforded the luxury of this strategy and position.

Having had good exposure to the beta trade off the bottom, bottoms-up issues are increasingly influencing my investment perspective and portfolio management positioning. As holdings run and hit my target levels, I am happy to let them go. And as prospective targets fall and look more attractive, I am happy to add them to the portfolio.