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I invested in the stock NYSE:CC but it has been dropping for no reason. I am thinking it may be because of Trump's ban on foreign investment but doesn't that only apply to tech companies? This is a chemical company. The price dropped by 4% yesterday and hasn't rebounded. Should I be concerned?

  • Well, you can't really expect any given stock to only ever go up and never drop. – void_ptr Jun 27 '18 at 17:32
  • why did you buy it? what do you think it's worth? If you think it dropped because of some political economic action that's the exact opposite of "for no reason." – quid Jun 27 '18 at 17:32
  • Same question asked yesterday. – Bob Baerker Jun 27 '18 at 17:37
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No, you should not be concerned.

How long have you held this stock? How often do you check its price?

This is within the normal variation of a stock price. If you buy it at say $50 you cannot expect to see it consistently climb to $51, $52, $53. It will bounce around within ~10% or so for a variety of small reasons, few of which affect the long term price of the stock.

If you're concerned about the short-term price of the stock instead, perhaps you should reconsider your investment strategy. If you want to sell your stocks to buy something within 3-5 years, you might want a safer investment like a CD. If you are thinking of selling now, DON'T. The concern you are expressing is not bad (at some point cutting your losses makes sense if the company is failing) but it is a very expensive concern. You'll always be buying when things are going well (high price) and selling when they are not going well (low price).

If you are investing for 5+ years, might I suggest an index fund? Something that tracks the whole market instead of one company. Unless you work for the chemical company you shouldn't have more than 5% of your investments in that one company.

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    “No, you should not be concerned.” - that’s quite an understatement. – NuWin Jun 27 '18 at 19:23
  • "This time is different" – Bob Baerker Jun 28 '18 at 20:17
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Stock prices don't change for "no reason". There is a reason. You may not know what that reason is, but that's not the same thing as there being no reason.

Stock prices bounce around all the time for many reasons. If you're a typical amateur investor, watching the price of your stocks every day can be a real roller coaster ride. If seeing the price go down one day, or for a couple of days in a row, causes you to panic, I think you're better off to just not check the price so often. Think longer term.

The stock market routinely falls when there is economic uncertainty. Right now the Trump administration is trying to renegotiate trade deals with various other countries. This makes the markets nervous. Trump MIGHT succeed in pressuring other countries to reduce their trade barriers to US goods, or we might end up with a series of retaliatory steps back and forth that seriously reduce world trade. If world trade goes down. companies that faced stiff foreign competition will prosper, but companies that relied on low-cost imports will see rising costs. There are winners and losers all around, and no one is sure right now who those winners and losers will be. So the market is sliding.

My opinion is, ride it out, in a few months (probably) we'll see where things are going, and the market will go up again. If you think you can predict where all the chips will land when they fall, then now is a great time to buy stock in the companies you think will be winners. Odds are you have no idea how this will end up.

Knowing when to sell is always tricky. If you buy when a stock goes up and panic sell when it goes down, then you'll lose money every time. On the other hand, if you ride a loser into the ground, you'll lose your whole investment. If I had a full-proof method for deciding when to sell, I'd be a billionaire stock analyst now instead of some schmuck posting on a forum.

  • "Knowing when to sell is always tricky." - no it's not, you should know where to sell before you ever buy, that is how you don't panic. You plan ahead, do your risk management, then you buy and then you just act on your plan. – Victor Jun 27 '18 at 21:41
  • @Victor Hmm. Maybe I'm misunderstanding you. Planning ahead when to sell would be great if you knew exactly how and when the price was going to change. I don't see how that would work in real life. I've held on to falling stocks and seen the price rebound. And I've held on to falling stocks and seen the price continue to fall. In one case the company went bankrupt and the stock was worth zero. I could wait for the rest of my life for that stock to reach some pre-determined price before I "sell". It's never going to happen. – Jay Jun 28 '18 at 3:24
  • Let me try to make it simpler for you to understand - you don't know exactly how and when the price was going to change - no you don't, but when you are buying, you know what the price is, so from there you can work out what is the absolute worst case scenario that if the price went down to that point, would I sell at. So, in other word, you buy, you know the price and you can work out what the maximum loss you would take on that stock is. You now have your exit point and you don't panic if the price drops to that level. – Victor Jun 28 '18 at 3:37
  • Regarding the scenarios if the price keeps falling to zero, you have saved the majority of your capital to reinvest. If the price recovers or starts recovering after you have sold, you can always buy back if the conditions are right, you may have lost a little due to buying back slightly more than you sold at and you may pay a little more in commissions (but with commissions so low these days that shouldn't really be a big issue). However, that would be a lot better than if the scenario where there was no recovery happened and you lost all your money. It is called risk management. – Victor Jun 28 '18 at 3:44
  • Well, okay, interesting strategy. But at heart, you've moved the decision of when to sell on a downslide from when it hits a given price to when you buy it. i.e. if you buy in January at 30 and in April it hits 20 and you sell, you're saying to make the decision to sell when it falls to 20 in January when you buy the stock, rather than waiting until April when it hits the low. The part I was saying was tricky was picking the number, not the date on which you pick it. Granted, your strategy could help one avoid selling in panic rather than making a reasoned decision. ... – Jay Jun 28 '18 at 13:54

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