It's a good idea to regularly reflect on your investing turkeys. Some turkeys are companies you never should have invested in. Other turkey investments can occur with solid companies, if you sell their stock for a loss. (Perhaps remarkably, some turkeys turn into swans.) A review of the turkeys in your portfolio should impart some valuable lessons.

First, examine your turkeys of yore. Make a list of all the stocks you've sold and the prices at which you sold them. Check to see how they're priced today. (This might be painful, so have some ice cream or cookies on hand for comfort.)

If most of the stocks have since recovered and are doing well, you probably should have hung on. Investors often jump ship prematurely, at the first inkling of possible trouble. Remember that many terrific stocks go through periodic slumps.

Take note of how many turkeys you've sold. If you've got a big flock of them, you may have jumped into too many stocks without doing sufficient research first. If most of your turkeys are actually still in your portfolio, you've probably been putting off examining your holdings. Such due diligence is time-consuming, but it's necessary. That's one reason we recommend that most people aim to own stock in eight to 15 companies, if they choose to invest in individual stocks. More than 15 or so, and it's hard to keep up with them all.

With all your turkeys, ask yourself how well you really know the firms. Often, we end up with unpleasant surprises because we never had a good handle on the firm's business. If you're invested in companies that are deeply involved in technology or biology, such as Amgen (NASDAQ:AMGN) or Cisco Systems (NASDAQ:CSCO) or Oracle (NASDAQ:ORCL), make sure you understand how they make their money, how promising their futures are, and how well they're positioned against competitors. If you don't understand a biotech firm's science or you can't tell a router from a switch, you may be in over your head.

With current holdings that are in the red, you need to figure out if more patience is required or whether you have a hopeless turkey on your hands. Are you holding on just in hopes of decreasing your loss? That reasoning, like a turkey, doesn't fly. Imagine that you bought $5,000 worth of Home Surgery Kits (ticker: OUCH) and it's now worth $3,000. You realize the company has little merit, and you're out $2,000. You may be hanging on, hoping for a small rise to make back some of that $2,000 loss. But you're probably better off putting that remaining $3,000 to work in another stock with better prospects. Remember: You want your money sitting in the most promising investments you can find.

One mark of successful investors is that they take the time to think about investing and learn from their successes and screw-ups. This can result in fewer screw-ups.