Linda, Your question is simple, answer difficult. The BEST answer I believe would be given this way.
(1) Make sure you are investing in a QUALITY stock.
(2) Attempt to BUY that stock at or near its 52 week LOW.
(3) If that stock drifts down after your buy, then ONLY consider selling that stock IF there is a GOOD reason to regain your capitol. Realizing to make up the loss you are taking, you MUST make that loss up in the stock in which you intend to invest that money.
(4) If you have no stock that, in your judgment, meets that requirment, then you will be better served to remain invested in the one where you are presently invested. Unless of course there is negitive news.
(5) To sell a quality stock without good REASON is foolish, that does not mean necessarily the REASON involve THAT stock. "Reason", might mean that you know of an event which you feel will move ANOTHER stock, and you want you capitol out in order to invest in it.
(6) Even if you do have a REASON and that REASON is another stock which has the potential to move quicker, in your opinion. If then, your previous stock does not move up while you are invested in the latter, You will still have time to invest in the former stock. One advantage you will have in the former stock is that you have a stock that you KNOW WELL, how it trades, where its bottom is, how much does it normally spike up. Knowledge like that is hard to grasp in a NEW stock. So OLD investments are good to remember, and follow, if you stay abreast of developments in the company, and industry in which the company is involved.
(7)Patience Seperates the BEST from the REST. A term used by Bill Mathews, writer of the Cheap Investor , which I like very much. Averaging down would be my focus in such a situations.
I suppose each situation has its peculiarities, so I'll focus on IHNI, which was a suprise to me. I Did not dump IHNI, I will hold unless IHNI drifted down to $.78 bid and I would only then be a seller of IHNI because of the special stiuation in FONR. Because of FONR I would cut my loss in IHNI and take the capitol and invest in FONR prior to this Supream Court denial of General Electrics appeal. ( Making FONR a very special situation).If there was no FONR in the picture I would hold the position in IHNI and average down if IHNI dropped to $.75 or below on the ask.
IHNI, in my opinion Is a good investment looking forward a year from now, and I fully intend to try to be invested in IHNI before investors begain to take the price back to that $4 to $8 level. Will I be able to time that event, that is where money is made or loss, TIMING. Reverting back to The Blue Cheap Stock TRADING philosphy, Buy a stock when NO one wants it, and SELL that stock when everyone wants it. |
