Quote Originally Posted by Prazak View Post
Then again, plenty of long-term investors took a 50% haircut in a very short time just this past autumn, and I wouldn't be surprised to see the market break sharply downward again in the coming months -- or to break up sharply. Lots of uncertainty out there. In my view stops are prudent long or short-term, leveraged or not, tax qualified or not, provided that they are set to accommodate one's risk preferences: not so tight that one is stopped out by short-term fluctuations, but tight enough to exit a severe downdraft.
Then their position was too large. You want the bulk of your position to be in what you consider low-risk assets. Stocks were never that. That said, I am not arguing against stops, just saying they are necessary for leveraged positions.