what do you do with individual stocks in a crash?

Stoney_21

Member
61 1
i got a little crazy the past few months and bought about 25 stocks (good ones that i researched extensively) . if there is a crash do you basically follow the old buy more rule or just wait it out?
 
M

member275544

0 0
i got a little crazy the past few months and bought about 25 stocks (good ones that i researched extensively) . if there is a crash do you basically follow the old buy more rule or just wait it out?
buy more when the market crashes is not a rule..or shouldn't be one of yours. Have a plan with them if I were you, although its a bit late given that you probably wanted a plan before going out and buying 25, but whats done and all that so manage the exit as best you can.
Decide what is a crash first of all. Also decide which of these stocks you have is also going to tumble and get out of it. Buy back when its done selling off and is beginning to turn. Not everything goes down because the market does.
Personally I wouldn't hold on, I'd be willing to lose 25% of my capital than see all of your capital sink lower and lower and never turn around again. Not everything from 2008 has turned around, just look at the banks for that.

so, in answer..no.
Don't buy more, and don't wait it out.
get out when the reason you entered is no longer valid and save that capital to get in again much lower down.
Buy low remember, not buy high and keep buying as it goes lower.
 

Stoney_21

Member
61 1
How would i know which ones are going to tumble? They are all rated as strong buys and overperformers. the reason i entered was for long term growth. Also i have about 40% of my portfolio in a cash position now. so if there is a crash im trying to decide if i should dump it all in the S&P or put some into the stocks as well. i also have 15-20% of my portfolio in bonds which i would sell at a crash to invest

Also if there is a crash i would probably empty out some of my liquid savings to invest as well but of course keep 1 yr of living expenses in there
 

Atilla

Legendary member
19,047 2,682
How would i know which ones are going to tumble? They are all rated as strong buys and overperformers. the reason i entered was for long term growth. Also i have about 40% of my portfolio in a cash position now. so if there is a crash im trying to decide if i should dump it all in the S&P or put some into the stocks as well. i also have 15-20% of my portfolio in bonds which i would sell at a crash to invest

Also if there is a crash i would probably empty out some of my liquid savings to invest as well but of course keep 1 yr of living expenses in there
If you have purchased good stocks after extensive research then one would hope you have balance in your portfolio which sounds like the case as you are holding some cash in reserve and also have bonds.

The question to ask is did you purchase for the short term capital gain or long term fundamental value + income prospect?

These can be only answered based on the diversification, content and objectives of your portfolio.

Defensive and low beta stocks with good dividend payouts likely to provide best balance cover from market falls. Right now markets seem to be walking on air imo :whistling.
 

barjon

Legendary member
10,332 1,570
.................. do you basically follow the old buy more rule...................
Stoney_21;2450658..................... im trying to decide if i should dump it all in the S&P or put some into the stocks as well..................... [/QUOTE said:
One way or another you seem determined to throw money at a falling market. Should that fall continue you may need deep pockets.
 

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Forexmospherian

Legendary member
39,928 3,299
One way or another you seem determined to throw money at a falling market. Should that fall continue you may need deep pockets.
Great chart Jon

I have not got a clue about Ftse / indices etc etc - a complete novice - but that quarterly chart seems to say something fairly clear ;-)

Regards


F
 

Trader333

Moderator
8,502 881
It depends on whether you are trading or looking at a longer term investment because in many cases although the value of the stock may have declined you still get the dividends. Also if the individual stocks are sound fundamentally then there is no reason to sell in my view as one thing we see time and again is the resilience of how quickly good stocks recover in price.
 

spinola

Established member
614 137
Read Jim Slaters Zulu Principle and apply that method for capital growth stocks.

To limit damage , I'd say use a hard stop 15%-20% on each stock to keep you out of trouble should a meltdown come next year or 2 .

If you can't see the tumble and react to it , you'll not know what to do, hence set a hard stop, until you better understand what's right for you.


This assumes your time horizon for returns is 12 months + .

Uncle Jim will guide you into stocks that should perform . They'll be underpinned with solid growth for past 5 years and have prospective earnings undervalued , thats when you step in for the revaluation as the institutions begin to pile in.

:) Good luck, but don't leave it to luck, leave it to Uncle Jim.

Nice one.
 

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