The Importance of a Stop Loss

Some people fear pain, I embrace it.... too much.

When investing, you need to distance yourself from the day to day movements of your portfolio, and stick to your plan. However, there are always situations that are unforeseen.. That is why it is good to have a stop loss in place. This mechanism will automatically attempt to sell your shares of a company if it falls below a predetermined level (or a fall ratio from its high for a trailing stop loss).