With the exception of a slight market correction over the last
couple of weeks, the stock market has performed incredibly over
recent years. The Dow Jones and the S&P 500 hit new record
highs as recently as last month, and while the NASDAQ is still
below its pre-dot-com bubble levels, it too has marched steadily
higher since the start of 2009.
As is the case anytime the market is strong, there have been
some stocks which have really set themselves apart from the pack.
In some instances, these stocks have so greatly outperformed the
broader market that their weighting may have become a problem for
Typically speaking, whenever you establish a position in a
stock, you try to give it a fair weighting in your portfolio. You
were comfortable investing 2% of your portfolio in the stock, but
unless you have been consistently reducing your exposure to your
strongest choices, chances are high that these positions may have
grown to a much larger share of your portfolio.
Where the problem occurs is that we never want to sell our
winning stocks. That is human nature. I would never suggest that
just sell your top performing stocks, so you can relax, because
that is not the point of this article. None of the stocks we
discuss are going to be stocks that I believe are sells in
today's market. However, I do believe that you should be aware of
the danger you run should you allow yourself to become too
heavily weighted in any one particular stock.
As we have seen in recent weeks, the market is capable of
correcting, and when they do, often times it is the stocks that
have greatly outperformed the market during the bull run that get
Each of the following stocks has enjoyed a strong run, and
investors would be wise to bank of those profits and
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