A "risk on" day as they are fond of quoting in the newspapers now.   This type of mentality is typical of hedge funds where the general thought is "what have you done for me lately?"  Most hedge funds have at most a quarter's worth of time leeway where they can lag behind their peers before clients become uneasy.

I am fortunate not to put that kind of pressure on myself and most investors should not either.  "You can't be smart every day" an wise boss of mine used to say and I try to think of that.  The important thing is to have a plan.  The last few down days I was buying a few core stocks because I still thought they were good values.  It hurt for a while because prices kept going down.

Today is a bit of a pay back.  However, it is important to consider if anything has really changed.  Germany has shown some softening in their approach so that is a bit new, but as Jim Rogers recently said, "You can't solve a high debt problem by adding more debt!"

I usually don't agree too much with him, but I am with him on this in the long term.  You can however, try to buy the market time to work it's way out of the mess.  This should be by combining reasonable tightness in fiscal policy with pro growth monetary policy.  Germany would have us just rip the band aid off immediately whereas Greece Spain and Italy want the mummy treatment.

Something in between would probably work best but we do need to give it time.  Constant reminders of "risk on" "risk off" and short term views won't lead us anywhere good.

Given that I don't really believe things have changed, I have taken the opportunity to trim back my CAT (losing) and GE (winning) positions as they had become rather large relative to other stocks.  I was trying to keep positions in the 1-2.5% range and CAT had grown to 4% and GE to 3% so I'll take the up day to trim a bit.  Overall though stocks are still about 46% of my portfolio.