Cutting Losses, continued
The 8% Rule Applies Only To Losses From The Purchase Price
The 8% sell rule, however, applies only to drops below your purchase price and does not apply to situations where you've already made gains on a stock. A part of being a stock investor is weathering temporary sell-offs that may be 8%, 10% or even larger. The next two lessons will teach you how to, in most cases, tell the difference between one such dip and a real problem.
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Related Resources:
Review IBD's 20 Rules For Stock Market Success.
Go to the Investor's Corner Archives to read IBD's "editor picks" of classic Investor's Corner columns.
Search our archive of Ask Bill O'Neil Q & A's organized by topic.
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