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How can I make my money back after a loss?

I have just lost $50,000 in trading options on the stock market. I borrowed this money to do so and am wondering if I should try and recover this loss over a period of time by borrowing more money to buy shares and keep them until they get to the price I can sell?

For me to answer this question I would be putting my head and financial adviser’s licence on the chopping block. You have got yourself into a bit of a pickle and it is hard to say that borrowing more will get you out of the pickle.

Let me give you some guidelines to help you arrive at a good decision. Ideally you would have a financial plan drawn up that would look at your goals, circumstances, your risks and the many options open to you.

A good long-term plan might make up your losses quicker than you think. However, given you have rolled the dice on options and lost, it could be smart to talk to a few stockbrokers and see what they say. Remember these people make money when you buy or sell shares so be critical of their advice.

Your time will come again and when it does buy great shares from top companies and ride the market up. Thinking you have to get your money back fast in a scary market could compound your problems.

My tips are: get good advice, buy great assets and wait for the right time to buy shares at good prices and ride them up. Good luck.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Wednesday, March 16, 2011

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