stock is a high-risk investment. Therefore, if you want to participate in stock investment, you must first be mentally prepared to lose money. Especially when the entire stock market is not performing well, it is easier to lose money. So, if the stock has lost half of its value, should we sell it?
The stock has lost half of its value, should I sell it all?
Since stock investment is risky and easy to lose money, it is necessary to control risks and stop losses. Because no matter who you are, it is impossible to guarantee that your accuracy in buying stocks will reach 100%, and mistakes are inevitable.
Stop loss can try to preserve the principal when we make mistakes, so as not to lose most of the principal because of one or two mistakes and never recover from it. However, stop loss is not done casually. Whether to sell all a stock that has lost half of its value can be decided from the following three aspects.
First of all, it depends on the investor’s personal investment style. Stop loss must be controlled within a certain range. If the stop loss cannot be controlled within a certain range, then the stop loss will lose most of its meaning. As for what this range is, different people may have different standards. Therefore, whether to stop the loss after the stock has lost half of its value depends on the person first.
For long-term investors, the stop loss range should be larger, which means they can tolerate larger floating losses. Because if long-term investors set their stop loss too small, they will easily trigger the stop loss, and then the long-term investment may become short-term. In addition, long-term investors are pursuing a higher return on investment, so they must also be able to withstand higher risks.
Therefore, for long-term investors, even if a stock has lost half of its value, it is not necessary to sell all the stocks, unless there are other factors that require the stock to be sold.
For short-term investors, losing half of the stock is already very much. Such a loss is unacceptable to short-term investors. However, if you still want to delve deeper in the stock market, it is best to stop the loss, unless there is a way to do so. Turn stocks from losses to profits without increasing investment, for example, by constantly doing T to reduce holding costs.
Because if the loss cannot be reversed, many people may choose to lie flat and stick to one stock until the loss is resolved. But this way you can neither learn much experience nor make much money. The next time you encounter the same situation, you will be helpless again, and there may not be another chance to get out of trouble.
Secondly, it is necessary to look at the trend of market conditions. The trends of most stocks are deeply affected by the trends of the stock market . If the market continues to fall, then there is a high probability that individual stocks will also fall. Otherwise, they may stabilize and rebound.
Therefore, after losing half of a stock, you need to make a judgment on the trend of the stock market before deciding whether to buy it.
If there is still no signal for the stock market to stop falling and stabilize, you may need to sell half of the stocks that have lost money, otherwise you will not buy them for the time being. Even if you want to sell, you must wait until it rebounds to a relatively high point before selling.
Again, it depends on the situation of individual stocks. The difference between individual stocks in the stock market is not just the name, but also the comparison between companies. For a company that has always been excellent, even if its stock falls by more than half in the market, there is a high probability that it will rise again in the future. After falling by 50%, it may be a new starting point for it, so there is no need to stop losses.
Once the stocks of junk companies fall by 50%, they may never have the chance to rise back, and they may even fall even further. And even if there is a chance to rebound after market conditions improve, it may rise more slowly. Rather than clinging to it, wouldn't it be better to stop the loss and buy other stocks?
