Do You Have Mediocre or Lousy Investments?

investingchartDo you have poor performing investments (stocks, mutual funds, index funds, ETFs)? If so, now might be the time to get rid of them.

Recently the Dow broke through 17,000 for the first time. The stock market reached an all time high.

When the markets are high, that is usually a good time to get rid of your loser investments. Loser investments are investments that:

•    Have been performing poorly over the years
•    Have reduced or eliminated their dividends over the last few years
•    Mutual funds with high fees

When the market is high, generally speaking most stocks and mutual funds will also be high. The investments might be trading at prices much higher than what you paid for them. I hate to lose money, so if I can sell a loser investment for more than what I paid for it then it’s a great time to sell that investment.

When the market is high, use that opportunity to sell your loser investments.

Be cautious of buying any new investments right now, remember you want to buy quality stocks when their prices are low (undervalued). There is no harm in waiting for quality stocks to become undervalued. Remain patient, educate yourself on how to invest, and you’ll be ready when the opportunity presents itself.

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2 Responses to “Do You Have Mediocre or Lousy Investments?”

  1. Good article. Just curious as to whether you are referring to a loser as one that did not appreciate in price or not grow the dividend or both? I kind of like the market to cruise along and buy stocks long before they appreciate, but once the market becomes frothy the pickings become slim.

    Good luck,

    Robert

  2. kanwal says:

    A loser stock is one which has one or more of these factors:
    - cuts its dividend, or over the long-term doesn’t increase their dividend either
    - has decreasing EPS
    - increases debt at a very high rate
    - payout ratio of over 100

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