Below is the column that appeared in the Sept. 11 edition. When you sell a stock is just as important, if not more so, as when you buy it. Selecting a stock with strong fundamentals and buying it at the right time is the first step. But even though you ve picked what you think is a good stock, you have to know how to sell to keep your losses small and your gains big. Achieving both of these objectives consistently will take your portfolio to grand heights.
All big losses start out as small ones.
If you study the stocks that you sold at losses, you ll pick up clues why they didn t work. Perhaps the stock failed to follow through after its breakout. Or it made a late-stage base. With practice, you might get to the point where you cut your losses even shorter, or get out even. Getting rid of your laggards quickly not only shields you from a catastrophic loss.