InvestorQ : Is it a must to have a stop loss for an investment position which is long term?
Anjana Aiyar made post

Is it a must to have a stop loss for an investment position which is long term?

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Anamika Sodhani answered.
3 years ago
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One question is whether you require to stop losses when you are invested from a long-term perspective? Technically you may not require a trading stop loss in such cases. However, you need to use some proxies to judge whether you need to revisit your position. Normally, the stock price breaking below the 100-DMA and 200-DMA are indicators that something is wrong with the stock. There are cases of company performance worsening as we saw in the case of Kingfisher, Satyam and Deccan Chronicle. Then there are cases where stocks have gone into structural bear markets for a prolonged period of time. PSU banks post 2013, Capital goods stocks post 2012 and IT and Pharma stocks post-2016 are all cases in point. In such cases also, there is a strong case to terminate your position and either shift to a different position or wait for the fog to clear.
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