It is an old saying on Wall Street that you should 'cut your losers and let your winners run.' Yet, human psychology drives us to do the exact opposite. We hold losers hoping they will come back to breakeven (loss aversion), and we sell winners to 'lock in' a profit (the disposition effect).

The most successful investors, like Peter Lynch, talk about 'ten-baggers'—stocks that go up 10x. You cannot get a ten-bagger if you sell after a 20% gain. The urge to sell a winner comes from the fear that the paper profit will disappear. This fear is irrational if the fundamental reasons for holding the stock haven't changed.

To overcome this, you must change your mindset. Instead of looking at the profit, look at the business. Is the company still growing? Is the thesis still valid? If yes, then the price action—even if it's volatile—is just noise. 'Sitting on your hands' is often the most active and difficult thing an investor can do, but it is also the most rewarding.