If one of your securities is in loss, you can set a maximum loss limit that you are willing to accept, for example 15%. If this limit is reached, sell your position immediately to avoid a possible even bigger loss. You can achieve the same effect by using a “stop loss” order. Do not hold a losing position for too long to wait for a hypothetical recovery. Often, if a stock is in trouble, the reason for the drop in its price is the poor financial health of the company.
