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Should I cut my losses when share prices drop by 30%?



Our response:

We are not able to provide advice, though we do try to provide general information to help. If you are concerned about the performance of your investments, speak to a qualified financial advisor who can help you determine the best action based on your investment goals and personal financial situation. There are many reasons investment prices may drop. Depending on the type of investments you hold, or the companies that you invest in, learn about some factors that can affect investment prices.

Prolonged periods of high or low prices may indicate a bull or bear market. A bull market happens when investors are optimistic about companies’ growth potential and profit outlook, and stock prices generally rise for an extended period of time until hitting a peak – the opposite is a bear market, where investors turn pessimistic and stock prices generally decline for an extended period of time, before hitting bottom. Learn more about bear markets and how to handle them when it comes to your investments.

If you are concerned about bear (or bull) markets in the future, consider creating an Investment Policy Statement (IPS). Having an IPS can help investors decide what to do in turbulent periods where you may consider buying or selling, and avoid making emotional decisions.

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