Bag Holder

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Definition of 'Bag Holder'

A bag holder is an investor who has lost money on a security that they have purchased. The term is often used in a derogatory way to describe someone who has invested in a stock that has fallen in value, and who is now holding on to the stock in the hope that it will recover.

There are a number of reasons why someone might become a bag holder. They may have bought the stock at a high price, and the price has since fallen. They may have been caught up in a pump and dump scheme, where the stock price is artificially inflated by promoters, and then falls once the promoters have sold their shares. Or, they may simply have made a bad investment decision.

Bag holders can often be found in the forums of financial websites, where they vent their frustration about their losses. They may also be contacted by unscrupulous promoters who offer to sell them a "surefire" way to make money.

If you find yourself in a situation where you are a bag holder, it is important to take a step back and assess your situation. Are you willing to hold on to the stock in the hope that it will recover? Or, are you ready to cut your losses and sell the stock?

There is no right or wrong answer to this question. The decision of whether or not to sell a stock is a personal one. However, it is important to make the decision based on facts and not emotions.

If you decide to sell the stock, it is important to do so at the right time. If you sell the stock too early, you may miss out on a potential recovery. However, if you sell the stock too late, you may lose even more money.

Selling a stock that you have lost money on can be a difficult decision. However, it is important to remember that there is always another opportunity to make money in the stock market.

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