One of the biggest hurdles to overcome in investing is the ability to remove our emotions from our investing decisions. Emotions can keep you in a losing position too long and keep you from unloading a winning position in time.
When positions go against us, our emotions want to convince us that the decision to enter into the stock was sound, and that it is just a matter of time before things turn around and we wind up being proven right. On the other hand, when we enter a stock that moves higher, we tend to tell ourselves how smart it was to buy into the stock at how there is plenty of more upside remaining.
Removing emotions from our investment decisions is never going to be easy. It is human nature to get attached to our investments, but if you can manage to look at your investments for what they are… investments… it becomes a bit easier.
Knowing when to sell wining positions, or at the very least sell a partial position in order to limit exposure to the stock can sometimes come back to haunt us if the underlying security moves higher, but being afraid of losing future gains can more often than not wind up costing you gains that have already been accumulated.
Here are five stocks that have outperformed the market, but appear to have traded into overbought territory. If you are holding positions in the following stocks with major gains, perhaps now would be a good time to put your emotions aside and lock in some profits and look for better value elsewhere.