Sunday, November 2, 2008

Average loss of all NSE stocks at 72.25 percent !!!

Retail investors who had held all his stocks through out the crash on the belief that it will go up once he sell it, has lost severely. On an analysis, Nandi has found that from Jan 8, 2008 closing to Oct 27,2008 low, average loss of all NSE stocks taken together was 72.25 percent. A good number of stocks even lost in the range of 85-95 percent. In the history of Dow Jones loss was maximum at 89.2 percent in 1929-32. The bear market lasted for four and half years during 1937-42 and six months in 1962. All these figures highlights the importance of strict application of STOP LOSS, to which retail investors are mostly reluctant. During this year's crash most retail investors might have suffered heavy losses and might be thinking that he should have exited long ago instead of holding it tightly. Even now, exiting all longs when Nifty touches Agni level will reduce the loss. For that one should limit the number of stocks being traded and avoid stocks that hit lower circuit very frequently.

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