What to do with the duds in your portfolio

Even the best investors make mistakes when it comes to picking stocks. John Stepek explains what you should do if you end up buying a dud.

Nick Train, manager of the Finsbury Growth & Income Trust, is an excellent fund manager one of the few consistently to have beaten the market over the long run. But right now, one firm publisher Pearson is giving him a headache. Train first bought in nearly a decade ago, but since 2013 Pearson has issued five profit warnings the latest in January this year as it struggles to shift from being a diversified publisher to focusing on digital educational content.

Train is hanging on, but it's clear the stock hasn't done what he hoped it would when he first bought in. That's a horrible situation for any investor. So what should you do if you end up buying a dud?

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.