How long to keep a stock at a loss?
First, always set a loss limit. Know when to get out when you are losing money. Depending on your goals you may want to set a 5-10% loss to trigger a sell.
Now if you are like me and when you got started you had no idea what a loss limit was, then you may have a few that have lost big. Here are 4 questions to ask before you sell:
Is this a long term goal/investment? The beauty of the stock market is that it does bounce back. Depending on the industry and the company, you could see it bounce back.
Is it a good value company? Do your homework. Is it a good value stock. This is a good sign it could bounce back.
How much are you down? If you are down over 25%, then it may be time to sell and take the hit. Keep in mind that farther it goes down the more it has to earn to bounce back to your entry point.
Can you off set your winnings with this loss? Taxes! Uncle Sam gives investors some breaks. One is that you are taxed on your profits minus losses. Check the tax law or a trusted accountant for more details.
If you have other suggestions, please leave a comment below!
Tags: finance, loss, money, recession, sell, stock market, tip
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