Sunday, July 18, 2010 7:42:16 PM
..... if your money is tied up in a stock that is a loser, ( worth less than what you paid for it) then you have lost money.
That money could have been in another stock that was a winner, or even in a CD at the bank. At least you would be making something on the $$$.
Stop losses are called stop losses for a reason. Any "investor" who doesn't manage their losses, has no business investing -- I guarantee you that you will be in the 85% of retail investors who lose money in the markets.
Paper Loss
“It’s only a paper loss.”
“If I don’t sell, I haven’t lost anything.”
You can tell yourself whatever fibs you want, but reality is the only way out of an investing mess. If you made a mistake or something unforeseen happened and you own a stock at loss, you need to decide what to do.
Your " paper loss" is becoming a lost opportunity and every day you sit on your "paper loss" is a day you could have invested your money in something that is earning you a profit.
Conclusion
No one wants a loss, but if it happens, don’t let your ego get in the way of making the right decision. Most of the time, the best course of action is to cut your losses and move on to the next deal.
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