This is a reprint of a five part series on investing I wrote about a year ago – tips to let your winners run and protect your downside.

When you are investing, an important consideration to minimize losses is to not put too much of your investing capital into any one idea. This is called position sizing.

A good position sizing rule of thumb is to limit each particular investment to 4 to 5 percent maximum of your total investible assets (one exception is if you are in a plan that invests in stock of the company you work for and you have investment options, do not invest more than 10% maximum in your company.) This will limit your risk by spreading it out over a bunch of investments.

Next time in Part 4, I will talk a little bit about trailing stop losses and how they protect you from major losses.