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Keep, Sell or Hold Your Investments

The exercise that follows focuses on your investment portfolio. You need an accurate, up-to-date picture of what you own and how it looks in light of your current financial situation. This calculator will help you pull the information together and give you an opportunity to assess realistically where you stand, as well as what you think you should do with your money/investments. So, take a deep breath, gather together your most recent statements from any and all investment accounts, and follow the six steps listed below.,

In column 1: List every single stock, mutual fund, piece of real estate or other investment you own, including variable annuities, variable life insurance, and whole life insurance.

In column 2: Enter the date when you purchased this Investment.

In column 3: Fill in the total price that you paid, including all commissions. For example, if you bought 1,000 shares of Cisco at $30 per share and you paid $47 in commissions, write $30,047 here.

In column 4: Enter the total value of what that investment is worth today. Again, if it was Cisco and it was worth $16 today, you would write in $16,000.

In column 5: Enter the gain or loss that you currently have in each investment.

In column 6: For every investment that you currently own, ask yourself: If you did not own this today and you had the exact amount of money that you have in column 4 in cash, would you-this very moment-buy this stock, mutual fund, or other investment? Answer yes or no in the final column.

Name of Stock
Mutual Fund
Date of Purchase Total Price Paid Current Total
Gain or Loss Would you buy
it now?

If You Answered Yes
The investments you would definitely buy if you could again today are obviously ones that you feel comfortable with. Now to check out how realistic your feeling is, look at column 5. If you have a gain and you still feel comfortable, just make sure that all is still going great with that company. If so, that gain should hold. If you have a loss, however, make sure you understand how that investment is doing and what will happen to turn it around. This is a nice and easy place for you to get in touch with what you have today in terms of your investments.

If You Answered No
Any investment to which you gave a no above is one that you now need seriously to consider selling, or at least to find out more about the reason for its disappointing performance. If you would not buy that investment again today, that means you do not really think it will go back up. So why are you holding on to it? Most likely, because you are waiting and hoping and praying that it will at least return to the value at which you purchased it. But in reality, that stock may never come back to that original value or even close to it. You have to face your fear of taking your losses or that fear will keep you from any gains. Take a good look now at the numbers in column 5 above and please understand that, whether they are on paper or not, those losses or gains are what you have today. Whatever you had no longer matters.