At Extreme Investor Network, we know that managing a portfolio of stocks can be challenging, especially when some of them turn out to be losers. But fear not, because we have some expert advice from CNBC’s own Jim Cramer on how to handle losing stocks.
According to Cramer, the key is not to panic and start selling off your winners to prop up your losers. This strategy can ultimately do more harm than good in the long run. Instead, Cramer recommends cutting your losses and selling the underperforming stocks, even if it means taking a hit.
“Never sell your winners to subsidize your losers,” Cramer advises. “If you need to raise money, sell something that’s not performing well.”
Additionally, Cramer cautions against holding onto losing stocks in hopes of a takeover. The reality is that very few bad companies receive bids, as it is challenging for CEOs to turn around fundamentally poor companies. In contrast, good companies with undervalued stock are more likely to attract takeover bids.
So, if you’re banking on a takeover to rescue your struggling stock, you may be waiting in vain. Cramer stresses the importance of not speculating on takeovers for companies with deteriorating fundamentals. If your only reason for liking a stock is a potential takeover, it may be time to reevaluate your investment strategy.
Remember, the key to successful investing is knowing when to cut your losses and move on. Don’t let emotionally-driven decisions cloud your judgment when it comes to your portfolio. Stay informed, stay rational, and stay tuned to Extreme Investor Network for more expert insights on all things money and investing.
