Stop-loss, Cut-loss for Switching Horses and Position Sizing and NO Leverage! (2)

Wah! Uncle8888 was very surprised when he read  If I am a dividend investor, this is what I would do….

4. No earn no sell especially for dividend stock. Keep long term, no stop loss policy because point 1 is followed.

This rule is contrary to what most people would do. No cut loss policy.

I have learnt this rule from Createwealth8888. If you didn’t do any leverage/plan allocation well (Rule 3) and only buy good stocks that let you sleep well (Rule 1), there is no need for you to cut loss.

Price drop, just hold and collect dividends as Panadols. Throughout the years, treat the dividend (or simply use the Trading around Core Strategy – Rule 5 below) to reduce the average cost of your shares. The worst case is stock goes to zero or in most case, your average cost will be reduced over time.

Read? Stop-loss, Cut-loss for Switching Horses and Position Sizing and NO Leverage!