No. of Recommendations: 6

I don't use stop orders at all. I might use a trailing stop for a stock I want to sell. Or if the stock I want to sell has good options I might sell a covered call that is likely to be assigned. For stocks I want to keep I either have no orders at all or I might sell covered calls that I hope expire worthless.

There are risks to stop orders, a flash crash might take you out of a position that bounces right back like many of yours did after March 2009.

As for what to sell, it really makes no difference what the stock did for you in the past, what counts is what it will do for you in the future. Or as Peter Lynch might say, sell when the story changes for the worse. Lynch didn't hold for ever. IIRC, he set targets for certain stocks and sold them when they reached the target. This would work for cyclicals. You seem to have "perennials" which you probably should hold until the story changes.

I consider the stop order a trader's tool, not an investor's tool.

Denny Schlesinger
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