Investing Basics: The 10% Investment Rule
As a stock market investor, knowing about the 10% investment rule is critical. This is the one rule that can help you survive bear markets.
It’s a simple rule; for example, if you own an individual stock that falls 10% or more than what you paid, it’s time to sell.
Using this rule does not allow you to rationalize the loss or wait for stocks to resume prices. When you invest in individual stocks, you do so with the knowledge that getting back on track after a loss of more than 10% can be a challenging task.
That’s why using the 10% rule is critical, especially if the market is dropping. It helps you become a savvy investor and know when to sell a stock and when to buy it.
However, this investment rule applies only to individual stocks.
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