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Bear Proves Why Cutting Losses Is Rule No. 1.(A)(Investor's Corner)

Investor's Business Daily

| January 02, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: David Saito-Chung

Investor's Business Daily

When this column returned to the front page on Aug. 23, 1999, it began with thesingle most important rule for growth investors: Cut your losses short. Always.

Last year was a darn good reason why this is still the No. 1 rule.

The Nasdaq finished 2000 down 39%, its worst year ever. In March, 954 stocks were trading at 50 or higher. By Thursday, those stocks had fallen 51% on average.

No matter how bruising this marke

t has been, your portfolio wouldn't have lost an arm or a leg if you had kept your losses small on each trade.

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