10. Portfolio Management: The Key to Success

Investment success depends on two basic things: picking good stocks that increase in price, and effectively managing the stocks after you buy them. Effective management means having a plan for either cutting losses or taking gains. Managing your stocks after you buy them is what determines your level of success. Great investing results are a product of shrewd selling rather than smart buying.

All investors will buy their fair share of both good and bad stocks. Even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success. If you sell your good stocks too early and hold ...

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