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Why you should let your stock winners run and dump your losers ASAP

Jeff Reeves
Why you should let your stock winners run and dump your losers ASAP

Many investors have heard the old saw that “it’s not a stock market, but a market of stocks.” The saying is meant to imply that while we talk a lot about the general direction of a bull or bear market, it’s just as important to acknowledge the qualities of individual stocks. It’s a mindset that’s worth remembering in 2018, when the S&P 500 Index (SPX) is sitting on a middling return of about 4% since Jan. 1, but there have been plenty of fireworks when you look at individual stocks across more focused time periods. Take blue-chip General Electric (GE) which has crashed and burned about 50% this year after yet another dividend cut, and compare it with perennial high-flier Netflix (NFLX) which is up more than 70% in the same period, thanks in part to big earnings in October.