Now, a question that people sometimes ask me with regards to selling is if they should cut loss? Well, from a valuation perspective, if we got into a stock which we thought is worth $10 a share at, say, $8 a share, and if the price should fall to $6 a share, should we sell?
OK, let us push this a little and let us say we thought the stock is worth $10 a share but for some reason, we bought it at $12. At $6 a share, should we sell? I think you know the answer.
Well, if we need the money urgently because there is an emergency at home, then, we don't really have a choice, do we? This is also why we must always use money we can afford to lose for investing. If we don't need the money, everything remaining equal, should we not be thinking of buying more if ......