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Selling Checklist 145

he’s not responsible for what his family did, Williams looks at him and says,
“It’s not your fault.” Damon half-heartedly accepts that, but it’s clearly not
really sinking in. So Williams physically grabs Damon and keeps repeating,
“It’s not your fault, it’s not your fault,” until Damon truly gets the message.
So, this is my way of grabbing you by the lapel to say again and again: “You
must cut all your losses short.”

“When you find yourself in a hole, stop digging.”
—WILL ROGERS

When you start investing you have 2 choices:
1. You can jump in without a “protection plan” and no limit on how much
money you might lose.

2. Or you can set a specific limit and cap any potential losses.
Pretty straightforward decision, right? And all you have to do to limit your
losses is just follow the 7%–8% sell rule.
The following graph shows why that’s so important.

300%
300%

250%

If you’re down 50%, you need a
200% 100% gain just to break even.
Cut all losses short!
150%

© 2013 Investor’s Business Daily, Inc.
100%
100%
75%
50%
50%
33%
25%
8% 9%
0%
Your loss
Gain needed just to break even

If you want to make big money, keep all your losses small.