When to sell a losing position — market signals instead of breakeven

In progressDecided Oct 28, 2026Review Dec 31, 2026

Decision

For any asset above its weight cap, I stop waiting to get back to my purchase price. Each asset gets one market indicator, compared with three months earlier. If it's unfavorable, I trim to the cap even at a loss; if favorable, I wait only until the next quarterly review (December 31). For gold, it's favorable when the US 10-year breakeven inflation rate is higher than three months ago. For copper, it's favorable when the gold-to-silver ratio is lower than three months ago. A rising ratio means silver, which has heavy industrial demand, is weakening against gold, which I read as a sign that manufacturing is cooling.

Why

My criteria were vague. Once a position was at a loss, I just held on, telling myself I'd sell once I was back to even. So for assets over their cap, I now decide with a preset indicator instead of my purchase price.

Expected outcome

At the end-of-December review, every asset over its cap has a recorded signal call (favorable or unfavorable) and the action that followed.

Options not taken

Ignore the purchase price and trim anything over the cap by year-end, gain or loss.
Keep the breakeven rule, but trim regardless of P&L if the weight crosses a second, higher threshold or two quarters pass.
Keep the current rule (sell only after getting back to the purchase price).