### Cutting losses does not necessarily mean that you were wrong in your investment thesis. It simply means that you have recognized a negative trend and made a proactive decision to protect your investment.

While investing can yield substantial returns, it pays to know when to cut your losses and cash out. It can be difficult to let go of a losing investment and face the reality that there is no guarantee of a recovery, sometimes it is better to accept a loss and move on. Here are some tips to help you know when to fold:


#### One: Have an exit strategy

Always plan your exit strategy before making a major investment. A stop-loss order or a price target are two examples. This way, you will be able to bypass rash judgment and make educated decisions in service of your objectives.



#### Two: Monitor your portfolio



If you keep an eye on your investments on a regular basis, you can spot potential problems before they become severe. Keep abreast of the headlines and the market's general direction.



#### Three: Cut your losses quickly

If an investment starts to go south, it is better to cut your losses quickly rather than wait for things to get worse. This may mean selling at a loss, but is still a logical decision. The alternative is holding on to a losing investment and hoping for a rebound that may never come.



#### Four: Do not let emotions guide your decisions

Investing can be an emotional experience, but it is important to keep emotions in check and make rational decisions based on facts and data. Fear, greed, and hope can all lead to poor investment decisions, so be sure to approach investing with a level head.

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Nothing in this article is financial advice. All information is presented for educational purposes only.

Cutting losses does not necessarily mean that you were wrong in your investment thesis. It simply means that you have recognized a negative trend and made a proactive decision to protect your investment.

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Sun Apr 23 2023 The Power Of Letting Go: A Guide To Cutting Your Losses

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The Power Of Letting Go: A Guide To Cutting Your Losses