Over the last six months, trader enthusiasm has driven the markets to new record highs, with most traders enjoying big gains along the way.
While the overall market has been strong, not all stocks have participated in the rally, and if you have one or more of these underperformers, your overall portfolio could be flat or even in the red for the year.
Selling positions is never an easy decision to make. Traders never want to sell their winners because they convince themselves that the positions will continue trending higher, and it is hard to sell losing positions because of the hope that the position will regain its footing and erase some of its recent losses.
One of the biggest mistakes any trader can make is to let our emotions take over, but sometimes you have to be willing to sell your losing positions and look for better value. Given the market’s recent strength, a lot of traders are worried about setting up new positions, but there are still some good values to consider buying in order to fix a broken portfolio.
If you find yourself holding some losing positions that do not seem likely to recover, you may want to consider going ahead and taking your loss on the trade, and replacing it with one of the following stocks.