There is always room for emotion in investing, and removing such emotion honestly takes a lot of the “fun” out of seeing above-average returns over time for companies one connects with on a personal basis; iconic investor Warren Buffett has bought stocks in the past based on his love for candy, or soda, or Burger King, or ketchup.
Indeed, having a connection with companies one owns makes it easier to understand the durable competitive advantage argument behind the trade, an essential component which should not be ignored.
That said, after an investor has chosen a stable of great companies using all the fundamental and qualitative data available, having a mechanical way to re-balance a portfolio annually or quarterly can be a very effective tool to manage one’s portfolio risk and maximize returns long-term.
Having criteria, or benchmarks, to sell off companies which have seen gains which have made them a higher percentage of one’s portfolio and reinvest those funds into companies that have similarly become a smaller percentage of one’s portfolio can balance out said portfolio to a level which makes sense long-term.
Invest wisely, my friends.