Investors sell off appreciated securities and reap profits, but they also hold on to certain stocks that keep declining, hoping against hope they too will rise from the slump someday. Even though the idea of holding on to your winners while selling your losers seem like a great idea in theory, it is very hard for an investor to put it into practice. For example, if you consider winning stocks, you might never know how good they could be if you sell them after you have reached your target. You might miss out on greater profits in course of time. Similarly, for a losing stock, there is no guarantee it will bounce back. So you need to be realistic about your investments and cut your losers free. It is hard to acknowledge that you made a mistake by investing in a losing stock. Yet, you should try and admit your mistake, learn from it and move on, so that you do not make the same mistake again. You have to judge companies by conducting a thorough research periodically and not let your emotions rule you, ever, in the stock market.