No Exit Strategies

Prior to making an investment, you should come up with a good investment plan. Along with all the goals that will guide you in your investing decisions, this plan must also include a sound exit strategy.

Investment plan

Whenever you buy a piece of stock, for example, you should always have a set of criteria that you can consult to determine if it is time for you to cut your losses and sell. Some of these criteria could be based on stock prices. If a stock drops down to a certain price, then you would have to sell it; or if a stock increases up to a particular price or maintains a stable price, then you could hold on to it.