How to Deal With a Stock Loss

Ups and downs happen in the stock market all the time, but a particularly big loss can be a big blow. After the sting subsides, there are things you can do to help recover and get back on track financially.

Difficulty:

Moderate

Instructions

1. Consider your options. Brokers have several theories. One is that the stock will recover, and the best action is to do nothing and wait for the stock to rebound. Another option is to sell, cut your losses and reinvest.

2. Make your move right after you've made your decision and know what you're going to do with the stock. Otherwise, the stock market may change again and you'll have to evaluate your situation from the beginning.

3. Reevaluate your investments to make sure you're making the right overall financial decisions. Your stocks should be diversified enough so that if one stock takes a large fall, your finances aren't doomed because your other stocks didn't take the same fall. In some cases, others go up and the loss isn't nearly as noticeable as it would be if you only had the stock that fell.

4. Prepare yourself for next time. Talk to your broker about putting stops on your stocks. That way, if they fall to a particular level, your broker will sell them and your loss can be minimized.

Tips & Warnings

• Even though stocks are unpredictable, occasionally brokers aren't honest. If your stock broker has been cheating you or handling your money unethically, seek legal help immediately.