Many investors tend to look at what their portfolio has done recently instead of looking at what it is likely to do in the future. Behaviorally, they see a handful of stocks in a strong rally, making the portfolio grow. They also see a handful of positions that are not performing well. Why not sell these dogs and buy more of what is doing so well?

If you go to the grocery store and your favorite food is on sale, and there is nothing wrong with it, you will buy more. It should be the same with your investments, right? If you liked the investment before and nothing has changed except the price decline, why wouldn’t you jump at the chance to buy more at a lower cost?

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William G. Lako, Jr., CFP®, is a principal at Henssler Financial and a co-host on “Money Talks”—your trusted resource for your money, your future, your life—airing Saturdays at 10 a.m. on AM 920 The Answer. Mr. Lako is a CERTIFIED FINANCIAL PLANNER™ professional.

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