Here is a scenerio that I am sure we have all seen or heard of before. So you purchase a stock and it goes up a little bit after you buy it, but then say it drops 4%-5. The question is what should you do in this scenerio?
Well, we will try to break it down for you. Before really breaking it down lets talk about the bad news scenerio or different cases. Such as, you purchase a stock that never reaches a selling gain level that you like say 15% or higher. Well, then we would look into allowing that stock to decline as low as 8% before selling (unless there is bad news thinking it could only get worse then we would look into selling at any point).
Next say a stock that is purchased goes to a 7% loss and a 29% gain, meaning your target is you start selling shares at a 30% gain and/or 8% loss. Then no matter what we suggest to stick with your guns and sell all share at the 8% loss stop.
Next case, if I have sold the stock once at the approximately 30% appreciation point. In this case, if you choose to only sell partially out at the 30% level we would then ride it all the way out for either a higher gain or sell completely out of it at a break even point.
Their are many other types of strageties out there about this kind of topic and where and when to let go of your stock. But, the biggest keys we suggest are stick to your guns no matter what. If you have a 8% stock loss than stick with that. And overalll you will see the benefits in the long run!