I advise that if the downward trend is caused by actual individual unfavourable conditions (and not general market conditions), it is best to cut one’s losses early, sell the stock and move on. Thousands of shareholders of the banks that failed to recapitalise in the 2005 Consolidation Exercise would now be wishing they had taken the step to sell instead of doing nothing. If in doubt about the significance of the news about a company on its share price, seek professional advice. Sometimes, it’s not just a company that has issues, it might be a whole industry – the same reactions should be applied to the stocks of all the companies in that sector.
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In choosing stock, one must avoid the hype generated by the so called “hottest stocks.” Always do your due diligence and refuse to be coerced by…
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