[Rich42]

Golden rule of investing……buy and hold!

[Eg_cruz]

Originally Posted by 44Apple

Do you tend to use stop loss orders?

I'm thinking of listing one for each of my etfs at the 10% loss point.

Seems like a holding could drop 10%, be automatically sold and then rebound the next day/week by a quick 8% or so and then I would be missing the rebound.

Thoughts?

10% may be a little low you may look at 15%-20%. It really depends how much gain you have in them now. With a stop you want to capture some of your gain not just your principal. With 10% in todays market it may hit in the morning and bounce back up before the close.
Just be sure you are holding on to the gain you are wanting to keep.
Yes stops are a great idea

[Stu from NYC]

Originally Posted by Rich42

Golden rule of investing……buy and hold!

Holding can be good but make sure what you own is still a worthwhile investment. Nothing lasts forever.

[bragones]

I would not use stop loss orders across the board but I do use them occasionally for highly volatile stocks. Be sure to distinguish between a Stop Loss Limit and Stop Loss Market order. If you use a Stop Loss Limit the stock could fall below you limit price at the open and never execute.

[Boomer]

Does anybody remember the “Flash Crash” on May 6, 2010?

There is a short article you can find on the Investopedia site that explains what happened. That was the biggest one — trillions — but there have been a couple of others, too.

I guess there are now measures in place to prevent it happening, but when computers make decisions, who knows. . .

When I first started investing online, without a broker, and would have a significant loss, I would print out a copy of what had happened, stick it in my desk drawer, and look back at it days or weeks later. I called it, “vaccinating myself” against emotional, quick reactions.

My Rule #1 is “Know What You Own” and Rule #2 is “Know Thyself.”

That is how I work it, so I have never used a stop loss.

Low Beta Boomer

[retiredguy123]

Originally Posted by LuvtheVillages

An ETF is a basket of stocks, often with some common feature. It is NOT managed. The basket of stocks remains the same through all the ups and downs. It is up to you to decide if this particular basket contains things you would like to own.

A mutual fund is a basket of stocks that IS actively managed. Some smart person (or computer) buys and sells different securities based on what he thinks will be most profitable. The mix can (and does) change frequently.

Not exactly. For example, Vanguard has an S&P 500 Index mutual fund and also an S&P 500 ETF. Both investments are designed to mirror the S&P 500 index. They are not actively managed, but the manager of both needs to buy and sell stocks within the mutual fund or the ETF to match the index. Mutual funds can be actively managed or not. The same is true for ETFs.

[retiredguy123]

Buy low and sell high.

A stop loss order seems to go against that strategy.

[RICH1]

Too old to be taking Risks… if you didn’t make it by now, you missed the boat!

[retiredguy123]

Originally Posted by bragones

I would not use stop loss orders across the board but I do use them occasionally for highly volatile stocks. Be sure to distinguish between a Stop Loss Limit and Stop Loss Market order. If you use a Stop Loss Limit the stock could fall below you limit price at the open and never execute.

If you can't afford to lose the money, you shouldn't be buying highly volatile stocks in the first place.

[dewilson58]

How did the Stop Loss design/strategy work for the Titanic???

[Caymus]

Originally Posted by retiredguy123

Buy low and sell high.

A stop loss order seems to go against that strategy.

Since 2008 the saying is buy high and sell higher.

[Geodyssey]

Originally Posted by RVJim

An ETF is an individual stock. Stop Loss orders are a good way to take a loss on a spike down and then miss the rebound. Better thing to do is to put together a well balanced portfolio and ride out the daily ups and down with an eye to long term performance. Unless you are a trader, you should just set your portfolio up and forget about it on a daily basis. If you are a trader, skip the stop loss and spend every day watching the market ticks.

You do not know what you are talking about.

The "F" in "ETF" stands for FUND. It's not "ETS".

Yes you can set a stop loss order on an ETF.

[Stu from NYC]

Originally Posted by retiredguy123

Buy low and sell high.

A stop loss order seems to go against that strategy.

The problem for most is when to sell high. Many years ago promised my wife to buy her some fairly expensive jewelry if price of a stock doubled.

It did and we sold and the stock went up and up and up. The value of the jewelry did not.

[44Apple]

Thanks for responses.

[RVJim]

Originally Posted by Geodyssey

You do not know what you are talking about.

The "F" in "ETF" stands for FUND. It's not "ETS".

Yes you can set a stop loss order on an ETF.

Actually, I do know what I am talking about. Let me see if i can break this down and explain it in bite size chunks much like I explain things to my 5 yo grandson.

The E in ETF mean EXCHANGE. The T in ETF means TRADED. Still with me? Ok, now you are correct the F in ETF means FUND. Score one for you - happy day! Ok, now, assuming you have got all that straight in your head, it’s called an EXCHANGE-TRADED FUND because .. wait did you see how I got those words in that order? Ok, it called that because because it is traded on an exchange just like a? I’ll wait .. A STOCK .. you got it, bingo! An ETF will trade on the exchange just like a STOCK even though it may have underlying equites (big word there, google is your friend on that) that make up it’s value.

So, there, you see, an ETF (refer to above if you have forgotten what that stands for) is just like a stock and trades like a stock.

Broken down for a five year old .. you still with me?