I don't set any stop losses. At the moment I only have companies in my portfolio whose strategy and operating business I understand and as long as nothing fundamental changes, I simply DCA when the opportunity presents itself. I would accept a 50% crash in any of my stocks. I think if you are so uncertain that you set a stop loss, you shouldn't buy the stock at all.
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@TaxesAreTheft
It's the same with my Core.
But I also have a few satellites that I treat myself to.
I also need a stop loss from time to time.
It's the same with my Core.
But I also have a few satellites that I treat myself to.
I also need a stop loss from time to time.
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2Mon
@TaxesAreTheft Your maximum loss is the only thing you can influence in the stock market. The theory behind this is called money management
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•@Yoshika Yes, of course, but I don't invest in companies where I would expect a total loss. Trades are a different matter.
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2Mon
@TaxesAreTheft But it's not about total loss. It's about risk management and limiting losses. It's actually about the stock market principle of "let profits run - limit losses".
Unfortunately, most non-professional investors do exactly the opposite. Unfortunately, this also applies to crashes against the market trend. There are psychological reasons for this. It's difficult to admit when you've been wrong and then you'd rather stick with it and hope for a turnaround (and then usually sell as soon as you've reached the purchase price again).
Professional investors always have an exit scenario. First and foremost. Before an investment is made, a sensible stop price is identified, then the maximum tolerable loss is used to determine the number of shares to be bought.
Unfortunately, most non-professional investors do exactly the opposite. Unfortunately, this also applies to crashes against the market trend. There are psychological reasons for this. It's difficult to admit when you've been wrong and then you'd rather stick with it and hope for a turnaround (and then usually sell as soon as you've reached the purchase price again).
Professional investors always have an exit scenario. First and foremost. Before an investment is made, a sensible stop price is identified, then the maximum tolerable loss is used to determine the number of shares to be bought.
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•@Yoshika I agree, but for me a price drop is not an exit scenario. You always have to combine it with a negative change in the fundamental data and the cost of opportunity. Of course you should reinvest your money elsewhere if you are sitting on a melting ice cube.
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