In Any Market, Employ A Sound Win-Loss Ratio.(A)(INVESTOR'S CORNER)

Byline: JONAH KERI

If you nailed one of history's greatest stock winners at the start of a long run, give yourself a hand. You know by now that one Home Depot or Microsoft can make a portfolio sing for years.

In a healthy market, a great stock can break out of its base, blast off, form new bases and keep climbing. Sticking with such a stock and pyramiding up with more shares along the way can make you hugely wealthy.

Too bad this isn't one of those markets. Breakouts have been scarce -- good ones even scarcer. The stocks that have made it through strong bases seem to roll over, again and again, after short gains. Worse yet, many stocks' failures have cut deep.

Your best defense? Probably to sit on the sidelines and wait for the market to reset. Once stocks start acting in a healthier manner, you can wade back in.

But if you insist on buying stocks in this minefield, try this approach. Consider taking gains when ahead about 15% to 20% on a stock. Then, instead of letting losses run to 7% or 8%, try cutting at 5%. By maintaining a sound ratio of gains and losses, you can achieve at least modest success in this market.

First, consider the tack of taking gains early. At first, it may sound ...