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Should I set a stop loss for long term investments?
Do not use a stop loss order as a long-term investor.  The arguments in favor of stop losses being presented by a few users here rely on a faulty premise, namely, that there is some kind of formula that will let you set your stop such that it won't trigger on day-to-day fluctuations but will trigger in time to protect you from a significant loss in a serious market downturn.  No such formula exists.  No matter where you set your stop, it is as likely to dump you from your investment just before it begins climbing again as it is to shield you from continued losses.  Each time that happens, you will have sold low and bought high, incurring trading fees into the bargain.  It is very unlikely that the losses you avoid in a bear market (remember, you still incur the loss up until your stop is hit; it's only the losses after that that you avoid) will make up the costs of false alarms. On top of that, once you have stopped out of your first investment choice, then what?  Will you reinvest in some other stock or fund?  If those investments didn't look good to you when you first set up your asset allocation, then why should they look any better now, just because your primary investment has dropped by some arbitrary[*] amount?  Will you park the money in cash while you wait for prices to bottom out?  The market bottom is only apparent in retrospect.  There is no formula for calling it in real time. Perhaps stop loss orders have their uses in active trading strategies, or maybe they're just chrome that trading platforms use to attract customers.  Either way, using them on long-term investments will just cost you money in the long run.  Forget the fancy order types, and manage your risk through your asset allocation.  The overwhelming likelihood is that you will get better performance, and you will spend less time worrying about your investments to boot. [*] Why are the stop levels recommended by the formulae invariably multiples of 5%?  Do the market gods have a thing for round numbers?