Past Performance does not Guarantee Future Results

This is a common saying in the financial world designed to warn investors about the uncertainty of the future. Yesterday, in the midst of a rally, I sold a good portion (60%) of my Apple, Inc. stock (AAPL). They say 'sell into a rally', except that the rally is continuing today and I could've had some more success with the stock if I just held on.

Allow me to explain why I did what I did:

First of all, I am strapped for cash. I retained only 6% in cash of my original portfolio and I was feeling like raising some money. I think I have some stocks in mind that I'd like to buy, (stocks that might better perform than what I currently hold), and Apple, Inc. (AAPL) was the best performer this week, so I sold to free-up some cash.

Second of all, I feel like Apple, Inc. (AAPL) is a 'volatile' stock, that is, is will rise greatly and fall sharply like it has in the past year that I've owned it, so I could expect to sell some rallies and generate some cash, then when the price comes down a bit, buy-up some more share at a reduced price.

I just don't know why I sold yesterday and not today. Why not hold the stock? It's a great company and holding on will work well in the long term. Why didn't I sell some 'dog' and simply rescue some cash from an otherwise difficult market to reinvest in something else that will make-up for my losses in another stock?

The fact is, like most investors, I am averse to losses. Although I made a little money (about 0.75%) on the trade, I sold at the first sign of progress, rather than risk another downturn. I tried to 'time' the market instead of trust in a great company with a great product.

All of this is to say that investing has a variety of emotions and reactions that come with it and we are all subject to rash decisions. My portfolio is performing better today than it has recently, but I am left thinking how my recent actions have affected the 'potential' of my portfolio's future earnings.