[Podcast] DGB 03: How and When to Sell Your Losers

Buying is easy and exciting. The problem comes when after a few months the stock underperforms. How did this happen? What should you do?

Selling losers is a common struggle among investors. Mike and co-host Vero share a few tips on how to identify them; when it is time to let them go; and how to make sure it doesn’t happen again.

Let’s clean up your portfolio!

You’ll Learn

• The definition of a loser in your dividend growth portfolio.
• When is the right time to sell.
• How to identify the source of the problem.
• How to prevent holding losers in your portfolio.
• Is selling your winners a good idea?

What Should I Do? Sell or Wait?

First rule: never sell your losers because you lose money.

Second rule: never keep your losers because you lose money.

Selling a loser is first and foremost an admittance that you were wrong. Nobody likes being wrong, especially when it means losing money. Denying the problem and keeping your losers forever is a self-destructive way to avoid the cold hard truth.

When we get hit with a 40%+ loss in our portfolio, many of us will be tempted to keep it for a while. I’ll keep my shares until I recover a good part of my losses. Bad decision.

More on the Same Topic

Sell Now – It’s About Time Someone Tell You This

Now It’s Time to Sell… 4 Tricks to Know When to Sell