Chapter 4. Managing Profits and Losses
Everyone contends with short-term price fluctuations, and even the most conservative investor may be susceptible to profit taking. Options can be employed to protect profits and even to take those profits without selling stock. On the other side of the short-term price question, options can be used effectively to eliminate loss positions through rescue strategies.
The conservative risk profile discourages short-term decisions, and speculation is contrary to your sensible investing philosophy. Your general buy-hold-sell rule is, buy well selected high-quality stocks, hold for the long term, and sell only when the fundamentals change. This smart investing approach does not preclude protecting profits when price ...
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