What can i do i loosing money on stock

Question

what should i do am loosing about $3000.00 every month on stock and my broker tell me to wait not to sell.

Answer 1

The advice given by the others looks pretty good to me.  Beyond that I would suggest that you may want to ditch your broker, if he's full service, for a discount brokerage.  (Unless, I don't know, you're just so gosh-darned rich it's worth the money, which considering, I really can't see how it could be.  Not saying you're not rich, just that noone's so rich they deserved to be fleeced)  In finance you often times really don't get what you pay for.

That goes double for managed funds.  A good many of such do not outperform the market, and do even less well when you subtract the fund manager's payments.  A good index fund, or a sector fund may never outperform the market but it won't do worse either.

Just as you would a mutual fund, a good idea is to check the 5 year performance of an index or sector fund before buying it.  Basically there are "enhanced" index funds, that use rules and criteria to exclude companies that are say for example up to their eyeballs in debt.  These enhanced funds have slightly more expensive maintainance costs (but still nowhere near as much as mutual funds), but also perform slightly better.  You want to find one where the broker has achieved the perfect balance between too little, and too much intervention.

Of course this rule of thumb works best for comparing index funds that buy from the same market index (Nasdaq, NYSE), or sector funds that buy from about the same industry (telecommunications, oil).  It's not entirely correct to compare funds that buy from completely different places.  Things change, you know.

Answer 2

it sounds like your broker doesn't understand your risk tolerance and you haven't properly explained your risk tolerance. for some people, even if they have a net worth of $10 million, losing $3,000 per month is difficult to stomach.

i think you need to find another financial advisor that can objectively look at your current investments and provide you with some honest feedback.  it doesn't like you have the time to learn everything about investments to make a snap decision so ask around for a good financial advisor.  interview several respectable advisors and hopefully you might get a common message on the quality of your investments and whether you need to cut your losses. hopefully, you'll also find an advisor that is more in tune with your investment risk tolerance.

Answer 3

it dpends on your time horizon.  if you're a long-term investor, and you believe that the fundamentals of this company are still strong, than hold on tol the stock.  you might even want to buy more!

however - one of the biggest mistakes that individual investors make is not being able to cut their losses, and holding on to a stock hoping that it will bounce back.  you have to be willing to take a small loss.  or on the flip side, if the stock has gone up, you should take your profits, rather than allow the stock to come back down.   you can always buy more if it does become cheap again.

Answer 4

your not losing any money till you actually sell the stock. People holding Indymac and Enron have nothing to worry about.  They will probably recover after a year or two.  They are still trading, so they have lost no money at all.  

REMEMBER, YOU HAVE LOST NOTHING TILL YOU SELL

http://finance.yahoo.com/q?s=ECSPQ.PK

http://finance.yahoo.com/q?s=IDMC.PK

Answer 5

I would suggest that you take a good, hard look at the company you are invested in. If you have already lost money, now is the worst time to get out, because you are forever locking in that loss. However, if there is absolutely no chance for a decent rebound, you may need to cut your losses. This is a tough one, but your broker's advice does make some sense.

Answer 6

your not losing any money till you actually sell the stock.  So since you have another month to decide i would:

Research the stocks, that your broker has you on, and learn what their long term projections are and dividends reinvestments, the whole nine yards on them.

If you find out they are good long term holds (just sucks they are going down right now) buy more of the stocks.  If they are the solid companies that your broker says they are, now you have a chance to buy them at a cheaper rate cause they are underperforming.  So if you bought 1000 shares at $40 dollars, and now the stock is at $30, buy another 1000 shares. When the stock hits $35 you'll have received all your intiall capital back, and then when it goes well above $40, you'll have twice as much.

If you are working (with a regular salary) i would only look at your stocks once a month and not worry about it too much, just keep adding to your portfolio. Its a Marathon, not a sprint.