Rebase your prices before deciding whether to sell

OK, say you have a share that has done fairly badly since you bought into the company. The first thought that comes to mind is that you should sell it and get it out of your portfolio. That is one approach but may not be be the best.

Any money that you have lost on this ‘bad’ share is already gone, basically you should at this point write off that money. Now make the current price the marker and review the share as if it were a new purchase and do the research that you would do in that case. Given the current price and the analysis you have done, is this a share that you would purchase? If it is then re-base it and leave it in your portfolio. If its future does not look as good as other prospects for your portfolio then by all means sell it and put the money to better use.

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