What to carry from this
A rule sells the
position you cannot
bring yourself to sell
01
Ask why before you click sell
If the answer is "it feels good to lock in the gain," that is the disposition effect talking, not a strategy.
02
A booked loss is a tool, not a failure
It offsets a gain, reduces your tax, and frees capital. The only loss that costs is the one you sit in because you cannot face it.
03
A rebalancing rule sidesteps the bias entirely
It does not ask how you feel about the position. It scores, ranks, and acts. That indifference is the product.
Emotional path
Sell the winner
Hold the loser
Optimises for comfort
Systematic path
Hold if rank is high
Sell if rank drops
Optimises for the portfolio
Find out which systematic strategy
fits your risk profile
rupeecase.com/risk-profile