Lessons to Learn from a Market Downturn (7 of 7)by Stephanie Powers
When To Sell And When To Hold: The market indicators don't seem to have a silver lining. The lesson: Know when to sell existing positions and when to hold on. Don't be afraid to cut your losses. If the current value of your portfolio is lower than your cost basis and showing signs of dropping further, consider taking some losses now. Remember, those losses can be carried forward to offset capital gains for up to seven years. Selective selling can produce cash needed to buy investments with better earnings potential. On the other hand, maintain investments with solid financials that are experiencing price corrections based on expected price-earnings ratios. Make decisions on each investment, but don't forget to evaluate your overall asset allocation.