I See Losses

n retirement accounts especially, seeing losses month after month is just wrong in our opinion.

Crow Financial Advisors uses a proprietary technical screening process to set stop-loss positions on almost every security held. That way, the decision to sell is no longer an emotional issue, but a logical one. We calculate a price below which we believe the stock should no longer be held.

In 2000, folks who kept their accounts in tech stocks saw huge losses. We have back tested our strategies and they sold every, single stock early in the bear market. Did we get out right at the top? No. Our stops allow for some amount of expected day-to-day volatility. Did our models keep us in and let us ride down with the indices until we saw 50%, 60%, 70% losses? No again. Our models got us out on paper in 2000, and in practice in late 2007.

A word about emotions and investing. Selling stocks to avoid losses is the toughest decision to make. Either investors hate to admit they made a bad decision, or they’re sure the stock will bounce back, or both. Allowing emotions to control your investment decision is a guarantee to buy high and sell low every time. At Crow Financial, our technical indicators tell us when it’s time to buy and sell, and there’s no emotion involved.