When to cut losers in your portfolio
We should not hang onto businesses that are losing ground to competitors, slipping into cash flow problems and generally showing signs of distress
GOOD investors are not always the ones who can pick shares that could shoot up in price. That ability can help, of course. But it is not absolutely vital.
Instead, good investors over the long run are generally those who are brave enough to cut their losses if things are not going right.
Bad investors tend to hang onto their losses for too long. They might also snatch profits far too early. The upshot is that they could end up with smaller profits and larger losses. So, here’s the question: Is successful investing just about running our winners and cutting our losers?
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