Retail investor: I always set a stop loss. Gotta protect myself from big drops.


Me: On great companies you actually believe in?
Retail investor: Especially those. Don't want to ride one down.
Me: So the market has one ugly week, your stop triggers, & you get sold out at the LOW... on a company that was elite the whole time?
Retail investor: ...that's happened more than once honestly.
Me: Then it recovers & rips to new highs without you. You didn't manage risk. You guaranteed you'd sell quality at the worst possible moment.
Retail investor: So stops are actually hurting me?
Me: On companies I believe in, a 30% drop isn't my cue to sell. It's my cue to sell portfolio secured puts & buy more shares.
Don't let a stop loss rob you...
Stops sell your best companies at the exact wrong time.
A drop on a great company is a sale, not a sell signal.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
Add a comment
Add a comment
No comments
  • Pinned