Selling down stocks and stocks that did not rise as expected can achieve several things. It can free up resources to buy other stocks that are more likely to appreciate. It can make your rising stocks more fully affect your product portfolio. Falling stocks that can dilute their results will be eliminated. Finally, it allows your product portfolio to focus more on the stock rise in more time. The very simple and purely hypothetical mechanical discipline can be used to explain the meaning of the title of this article. Let’s assume that the investment results are random. The stock fell by half and rose by half. It also assumes the randomness of stock changes. Finally, suppose that all the stocks we buy have rules. If they are 8% lower than the highest price after purchase, they will be sold.
Even if half of the stocks we buy fall and half rise, our system will make money. Because it will never allow any loss to exceed 8%, and will also make the rising stock fall 8% from the highest price after purchase. Therefore, if the stock gets 60% of the return before the allowable limit of 8%, it will lock in 52% of the return. There is no necessary limit to the profit of a given warehouse, but the loss can never exceed 8%. That is to say, even if the stock moves in a completely random mode, the total return will exceed the total loss. The rules used are even more important to profitability than the ability to become an excellent stock picker.
Sale of shares; “Inappropriate behavior”; after releasing assets, investors can reallocate them to stocks with greater profit potential. Just as individuals control expenditure in all other business activities, it is necessary to control the expenditure of investment enterprises. These small losses are only the administrative expenses needed to operate profitable investment enterprises. Let’s use marketing yuan. The important concept here is inventory management. It is very important for businesses to free up shelf space and allow more resources(money) to purchase mobile inventory. To free up resources and shelf space, smart merchants usually sell non mobile inventory at a discount, sometimes at a loss. Businessmen believe that loss is only one of the costs of doing business(such as electricity, gas, water, rent, labor and taxes).
Due to the volatility of the market, flexibility must be maintained in order to obtain the best results. Just because it is not “good” to bear losses. “Absolutely necessary.” But even so, in order to avoid losses, retaining depressed people is not the best course of action. If a loss occurs shortly after the purchase, it is usually unexpected. This means that something has just happened and stocks are not very popular. The greater the decline, the greater the possibility of negative events(land affairs events, FDA decisions, court decisions, comments of company executives, achievements of competitors, etc.).
Our testing and our own clients’ experience in the stock sector. Com research shows that in a volatile market, when a stock is sold with a small decline(the recent price trend of the stock and the decline beyond the expected probability range of the current support level), its performance will strengthen. Although this behavior is not always the best for a particular industry, we know that it will produce better results over time. Although it is not always “;” Absolutely necessary. “When the stock is sold when it falls(perhaps we believe the position will recover in time), we know that if we sell and reallocate assets, we will achieve better long-term results.”
In order to maintain a successful product portfolio, losers and losers must be constantly eliminated. This is like pulling out weeds in the yard, which does not hinder the growth of ideal plants. The main contents include: The time percentage of most rising stocks in the portfolio determines the performance; if the loser stays in the portfolio, it will offset the earnings of the winner, thus affecting the performance. Smart traders want to get rid of the loser. Only in this way can the winner improve the portfolio. The market is open. Sometimes most people can’t sit in front of the computer all the time. This is why a good stop loss strategy is important. We believe that the stop loss should increase gradually as the stock rises. For example, one can adjust a stop loss order in the afternoon after the closing, in the evening before going to bed, or in the morning before the opening. If these adjustments are not made daily, they must be made at least once a week. By issuing a loss prevention letter to the broker, individuals do not need to continue to “sell”. Paste:; go to the screen to monitor the stock. On the contrary, he or she can forget the market and handle other businesses. And if the stock is sold, the sale will be carried out according to the plan carefully conceived at a stable moment.
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