Stop loss positions

[LooseCannon101]

If you have bought a highly diversified global equity investment trust, then there will be times when it decreases 20-30% from its peak value. Conversely, there will be times when it rises at double its long-term average rate.

Selling after a significant change sounds good, but experience has taught me that the market can run a long way in both directions - much more than can be predicted. A high price this year can easily lead to an even higher price next year.

As a long-term buy and hold investor, I try to buy at a reasonable price and if possible increase my buying as the market goes down. I do not use a 'stop-loss' strategy.

[Pastcaring]

I've always thought they should be called stop profits.

In the short term as people have said ,YES.Options as insurance yes!.Trailing stop yes!.How much are you prepared to lose,5--10--15%, is it worth it?

Is it not obvious that you buy shares when the price has fallen,not sell them ( here they come again ( insert name of company here that went bust ) that proves what they want to see.

In the long term a guaranteed stop profit.Using Westpac again crash of 1987 ,they hold up,then start falling hit bottom around 1992,$6 down to say $2.50.During the event I am thinking where is bottom,can I pick it,answer no.I missed it,lack of experience lack of cash.

I am certain they will rise again so why sell.I am certain they will continue to pay dividends.Why sell?

In hindsight where would you put the stop loss? The share price rises ,the dividend rises.With capital growth and dividend you have given up say $50 over the next 26 ish years.Where would you put the stop loss?

Same thing today,top of $30 in 2007 ,crash to $14 ,rise to $41, crash to today @ $28 ish.Dividend is higher today than 2007,never missed paying a dividend for 100 odd years that I know of.I am expecting the share price to come back after the storm,I expect them to pay dividends every year for the rest of my life .Where would you put the stop loss?

I will now hand over to the other side of MR market,I see blue skies,they see the sky falling down,the grey skies are so heavy.

Look what Lloyd's bank have done over the last 10 yes,forget the huge profits and cash earned in the previous 150years on a buy and hold basis.That doesn't prove what they want to see.

Bring out the big guns ,spend an entire life in constant fear because , drum roll, ( insert name of company here ) went bust.Taaaa- -- Daaaa.Exit stage left to a huge round of applause from the crowd.

My 2 cents worth