COVER STORY
So you ’ ve bought a dud
If you have neglected your portfolio since the start of the year , there may be a difficult process of adjustment ahead . Stocks that appeared to have a fabulous trajectory of growth in the post-pandemic world have been subject to a dramatic reappraisal by investors . This has been particularly evident in the technology sector : Zoom has dropped 80 % from its highs , Shopify 82 % and Snap 84 %. Anyone holding these companies and the many others that have seen dramatic falls may be wondering what to do next . It is a dilemma for anyone who worries they ’ ve bought a dud . Should they hang on in the vague hope their investment will return to its peak ? Or cut their losses and reassign their depleted capital elsewhere ? Investors will be used to the refrain that they shouldn ’ t panic-sell at times of market turmoil . This applies here , too . It is important to accept that the past is over . There is no point selling everything just so you can get rid of all those red numbers reminding you of your mistakes . You need to look at your duds objectively , and decide whether they can make progress today or whether there are better opportunities elsewhere .
Head in the sand Yet David Jones , chief market strategist at Capital . com , urges investors not to ignore these losses : “ We have all bought stocks that didn ’ t perform as we might have thought – and the temptation can be to just stick our heads in the sand and hope they come back . But that ’ s not a very disciplined approach . “ Just because an investment has experienced a horrific drop , it doesn ’ t mean it can ’ t fall further . A stock that has fallen 90 % in value is one that has fallen 80 %, and then halved .” Sanford DeLand ’ s chief analyst Eric Burns warns that , unfortunately , things are unlikely to get better for
/ 8 / trustnet . com