Dendreon (DNDN) surprised many investors this week when it filed for Chapter 11 bankruptcy protection. The biotech company and its revolutionary prostate cancer drug was once the darling of Wall Street. Today the stock is worth just pennies.

So it’s not hard to understand why an investor would have made Dendreon a big chunk of a portfolio, nor is it hard to understand why investors would want to load up on shares of Alibaba (BABA) the world's biggest and hottest IPO in history. 

However allowing emotion to rule is a classic mistake investors tend to make, says Jonathan Hoenig of CapitalistPig.com. "They like certain stocks a lot so they buy a lot; they are not so sure about others so they buy just a little. In my opinion, this is the wrong way to approach investment.”

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Instead Hoenig says investors should pick a standard position size for stocks, bonds and ETFs. “You need to pick a standard trading unit, a trading size that is a percentage of your particular portfolio.”

Hoenig recommends position sizes that range from 3% to 5% to allow investors to be nimble when some stocks perform and others don’t. “Pick it and stick with it and essentially let the market tell you to cut the losers and let the winners run.”

Staying consistent with the size of your individual investment assets can help investors avoid what Hoenig sees as the worst and most common scenario. “What ultimately ends up happening is the small position does very well, the big position that they took underperforms and they lose money.”

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