How to safely exit a falling security?
"If the stock is below its purchase price, there is no way to exit the position immediately without taking losses. Since presumably you had Good Reasons for buying that stock that haven't changed overnight, what you should probably do is just hold it and wait for the stock to come back up. Otherwise you're putting yourself into an ongoing pattern of ""buy high, sell low"", which is precisely what you don't want to do. If you actually agree with the market that you made a mistake and believe that the stock will not recover any part of the loss quickly (and indeed will continue going down), you could sell immediately and take your losses rather than waiting and possibly taking more losses. Of course if the stock DOES recover you've made the wrong bet. There are conditions under which the pros will use futures to buffer a swing. But that's essentially a side bet, and what it saves you has to be balanced against what it costs you and how certain you are that you NOW can predict the stock's motion. This whole thing is one of many reasons individuals are encouraged to work with index funds, and to buy-and-hold, rather than playing with individual stocks. It is essentially impossible to reliably ""time the market"", so all you can do is research a stock to death before making a bet on it. Much easier, and safer, to have your money riding on the market as a whole so the behavior of any one stock doesn't throw you into a panic. If you can't deal with the fact that stocks go down as well as up, you probably shouldn't be in the market."
I think you are having trouble understanding what 'liquid' means. Liquidity refers to how easily an asset can be converted to cash. More liquid = more easily converted to cash, less liquid, less so. Any kind of exit load is going to make an asset less liquid due to the penalties associated with making the sale. So, the whole point of liquid funds is to give people the option of selling quickly if they need to. Since an exit load is meant to discourage this behavior, liquid funds tend not to have one. The point isn't what the financial institution 'gets', it's about offering a service to clients with a particular investment need. The market is for sophisticated investors who have money to lose.  If you fall into that category then you belong there.  Otherwise it would be wise to have no confidence in the market whatsoever.  There is more borrowed investment money in the market than ever.  There are more derivatives out there than ever.  There is less regulation than ever.  The market makers will exit the market for the sole purpose of watching it drop in value as everyone else tries to get out at which time they will jump right back in after the crash. Its a game for them.  A very profitable game at that. Any publicly traded financial instrument can be sold short, in theory.  There are, however, many regulations associated with short sales of US equities that may prevent certain stocks from being sold short at certain times or through certain brokers. Some examples: the most basic requirement (this isn't a regulation, it's just the definition of a short sale) is that you or your broker must have access to someone willing to loan you his/her shares.  If you are interested in shorting a security with few shares outstanding or low trade volume, there may simply not be enough people in the world willing to loan you theirs.  Alternatively, there may be a shareholder willing to loan shares, but your broker may not have a relationship with the clearing house that shareholder is using.  A larger/better/different broker might be able to help. threshold securities list - since 2005, each day certain securities are not allowed to be sold short based on their recent history of liquidity.  Basically, if a certain number of transactions in a security have not been correctly settled over the past few days, then the SEC has reason to believe that short sales (which require extra transactions) are at higher risk of falling through. circuit breaker a.k.a. alternative uptick - since 2011, during certain market conditions, exchanges are now required to reject short sales for certain securities in order to prevent market crashes/market abuse. I can't believe he disrespected exit strategies.  Exit strategies are the most important part of starting a business in my opinion- being   to get out of a business with your life still in tact is crucial. I have started 6 businesses and have successfully exited 4 of them.  I know friends and family who started businesses with no exit plan and are now grinding away their lives unhappily, feeling trapped in a business that isn't worth being involved in anymore.  A lot of times things don't go as planned in business, and a clean exit is a way to move forward with life with your chin up. "Modern portfolio theory dramatically underestimates the risk of the recommended assets.  This is because so few underlying assets are in the recommended part of the curve.  As investors identify such assets, large amounts of money are invested in them.  This temporarily reduces measured risk, and temporarily increases measured return.  Sooner or later, ""the trade"" becomes ""crowded"".  Eventually, large amounts of money try to ""exit the trade"" (into cash or the next discovered asset).  And so the measurable risk suddenly rises, and the measured return drops. In other words, modern portfolio theory causes bubbles, and causes those bubbles to pop. Some other strategies to consider:" This has been alarmed on for years. From the explosion in housing cost and resulting debt, to loans being off-balance-sheet, to the high amounts of subsidization of industry (i.e. finished steel beams being delivered to countries for less than some pay for raw iron ore). There simply isn't a way of knowing how or if it will fall out, since the government is already putting controls in place. And it is even harder to tell because of the lack of transparency from the Chinese government. The safest real estate investment is to underpay.  In most areas the market is very public.   Flippers are abundant, because most people want a move-in ready home, and as it is leveraged, they will overpay for that luxury.        Buy an under market, and you are safer.  The people who lose their shirts buy new condos at market rates at the peak of the market.   At the same time, people are purchasing starter homes that need a little work, and stay well above water.       Always remember you can't change the location of a home, but you can change almost everything else.   Find a well located but beat up home priced well under market, and financially you will generally do very well. Buy a share - not a penny stock; rather a well known company like Coca-Cola, Kelloggs, Exxon, etc.  Follow the company.  Understand their business model.  See the share price fall and rise.  You will learn a lot having your own money at risk.