Nobody ever likes to admit when they are wrong, but sometimes it’s really the best to just reduce and run your losses. This can apply to many different things in life, from relationships to money, but because this blog focuses primarily on good personal financial habits, we immediately have the money components dig. Here it’s time to cut and turn on two large asset classes:
Stock -investment
Let’s face it – chances are that you will eventually choose a loser and eventually take a big loss in a stock. When you buy individual shares, there is a high risk that you will take that the investment can lose money. As such you must make a number of rules for yourself about when you should sell. For example, you can decide to sell when the share falls by 10%, or maybe 20%. Whatever threshold you choose, think about how you could use the same amount to invest elsewhere instead of leaving it in a losing investment and only record valuable money.
The bottom line is that you must have a rule that you perform across the board as soon as a shares fall under a certain percentage. That is why you can remove emotion from the comparison and reduce your losses when needed.
Property
Real estate is another investment where you sometimes have to decide when to cut and run. For example, if you have a holiday home or Timeshare that you no longer use, you may want to consider selling it. The good news is that when the housing market is no longer, people still buy houses as long as they are mentioned for reasonable prices.
Timeshares, however, are a much more difficult sale. If you want to sell your Timeshare, you may not get too much for it. But not having the Timeshare, you shall Store yourself to pay your annual maintenance costs.
And by getting rid of excess ownership, you can also save yourself from paying extra real estate tax or other reimbursements that are linked to them.
Photocredit: Byoogie
#time #cut #carry #investment