Friday, March 31, 2006

stock fall, cut your loses, stock loses

Do you still believe in the rule that you should sell if your stocks fall 10%? With it being so hard to determine Fact from Rumor how can you be sure it's the right thing to do?

Yes, it's very important to stick to your guns -- in fact, more than ever. As discussed above, investors that've been utterly wiped out by stocks like Lucent, Enron and Worldcom probably wished they'd cut their losses at 10% when the companies were still "good companies." The good thing about having a 10% rule is that you never have to separate between fact and rumor -- since you protect yourself no matter what.

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