Everyone is positive on 2018's returns I looked around at other people's view of 2018. Most, if not all, feel that 2018 will be a positive year but the returns will not be as good as 2017's.
I also feel that 2018 should be positive for stocks. But I am more cautious when everyone feels the same way. Usually when everyone feels the same way, things will turn out different.
Hedging against errors in viewpoint It is possible that my views may turn out to be wrong. E.g. I did not expect 2017 to be a such a good year for stocks. Hence, one may need to hedge against the possibility of having wrong viewpoints.
For investors, hedging against wrong viewpoints can be done by - having margin of safety in buying stocks - having fixed stock-bond/cash allocation - selling half of stocks when stock rise 100%. - diversification i.e. having more stocks in your portfolio.
Re-learning my selling rules This year, I have not abidded my selling rules faithfully. When bad news hit a stock, I should h…