STOP LOSSES

[WES]

What % stop loss is normally used on a long term portfolio. My stop losses are set at 8 % and I keep on being stop out, just to see the share rebounce. Are my stop loss for the LONG TERM to small.

[Werner_1]

I dont use stop losses on my long term portfolio, rather just set an alert and make the decision when it alerts you. My view is that when selection long term shares, you willing to hold for more than 5-10 years, so small fluctuations are not important, my selection strategy is for solid companies that if they drop i am not that concerned, so no stops...

[DR_1]

Long term an 8% move down and up should not worry you. If you in for the long term, unless the company goes bust or starts going the wrong way, one sholdnt let short term moves effect you

[louisg]

Wes, as a long term investor you should be focusing on the long term earnings/dividends of the company and NOT on the short term PRICE of the share, unless you considering increasing your holdings in that company. OMO

[AJT]

Do not have a stop loss on my long term portfolio. I select shares I intend keeping for 10 years and beyond and tend to rather buy on the dips. I do however monitor management changes and other news coming out the company to evaluate whether or not to keep the share in my portfolio.

[prancing_horse]

I can only echo what the above replies have already stated but would like to add the following. A long term portfolio must be held in a separate account to an account where you may want to buy and sell shares, if not you will not have a hope in hell convincing SARS that the shares were bought as a long term investment and not for trading.If a share is held for less than 3years you will be classed as a trader, and any profit, will be added to your income for that year and be taxed accordingly, this may affect your whole portfolio irrespective whether some of the shares have been held for more than three years.Therefore if you want to invest long term pick good dividend paying companies and forget about them, on selling you will still be taxed but only the Capital Gain tax formula will apply.Bottom line is have seperate accounts, the monthly charge of running two accounts is cheap when compared to the tax saving.