I am doing a review of my own portfolio and this just comes as good information and good timing so need to put it here for reference and memory.
Maybe you can use it as well? From Mark Minervini Blog
10 Steps to take to lessen portfolio risk
How should you brace yourself for volatile times or worse, a market correction; what exactly does taking a defensive posture mean?
Other than the obvious answer of going to 100% cash, here are a few suggestions for reducing risk exposure in your portfolio during a volatile or corrective market environment:
1. Get off margin immediately
2. Raise at least 25-50% cash
3. If you choose to trade, take smaller than normal position sizes
4. Reduce overexposure in any one industry group and diversify more broadly
5. Reduce exposure to high beta stocks
6. Avoid laggard stocks (even if they look cheap)
7. Nail down profits when you have them (be less greedy)
8. Tighten up your stop-losses (be less forgiving)
9. Sell all stocks that break down in price (especially if they can’t rally)
10. Upgrade in quality and reduce exposure to low priced stocks
–Mark Minervini
POSTED BY . AT 1/21/2011 02:41:00 PM