Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

Try this exercise: The next time the stock market rockets higher, look at your portfolio and sell part of a position in a stock where you have a profit, a stock you know is overvalued. This action takes only a few minutes to do and allows you to put money in the bank. Done on a regular basis, this is a sure way to lock up gains, have money for investing in stocks that are underpriced, and make yourself feel great.

This is an excellent exercise for investors. It puts discipline into investing. Just like regular exercising, discipline is the key to success. Trading is not the goal here. Rather, you're looking to take advantage of "irrational exuberance" in a stock that has gone well beyond a decent valuation, such as a P/E (price to earnings) ratio that is much higher than the growth rate. Also, you're not looking to sell all your position. In fact, you may want to buy your full position back when a more rational valuation returns. If the stock continues on its irrational way, you still own shares and can sell those at an even higher price.

Ted Allrich is the founder of The Online Investor and author of the just-released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

The last two columns described my experience with two biotech stocks. One was bad: Hollis-Eden Pharmaceuticals (NASDAQ: HEPH). One was good: Dendreon Corp. (NASDAQ: DNDN). (Please note that I am not recommending you buy or sell either of these.) Here's what I learned from the experience of losing a large amount of money, then gaining some of it back.

First, I got greedy. As they say on the Street, bulls and bears make money, pigs get slaughtered. I over-leveraged my position in HEPH because I got carried away with the science. I thought the stock was a sure winner. With all the indications coming from Washington that the company qualified for a contract, it just seemed impossible to lose. So I put way too much money on one stock, thinking this was a sure thing. But it wasn't. Without a contract, the company had no other revenues.