We're all human. We get attached to stocks and ETFs that have been big winners in our accounts.
But as Hedgeye CEO Keith McCullough reminds investors in this clip from The Macro Show, one of the most important aspects of investing is staying dispassionate—and having the discipline to reduce or cut winners when they start breaking down.
McCullough highlights natural gas (UNG) as an example. After being one of his best positions for three months, UNG broke Hedgeye’s TRADE signal, prompting him to reduce his position size.
He also points to corn (CORN). When his bullish signal flipped bearish, McCullough exited his long position and later shorted CORN. Since then, it has generated returns as a short for ETF Pro Plus subscribers.
"It's my challenge - and it's yours - to get out of positions systematically with 100% discipline. But it's a challenge," McCullough says. "But you have to learn from those mistakes - and I've got a lot of them that I've learned from."
Remember: They're just tickers. Invest with a proven process by subscribing to The Macro Show.
