How to survive a shock

Buying individual stocks is a risky business, so what can you do when a stock you own is hit by unexpected bad news? John Stepek explains.

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This is the worst of all possible strategies
(Image credit: DNY59)

Last month investors in Petrofac got a nasty shock when the FTSE 250 oil-services group suspended its chief operating officer. The move came as part of a wider probe by the Serious Fraud Office (SFO) into Monaco-based Unaoil, a consultancy that is alleged to have paid bribes on behalf of oil companies. Petrofac's share price tanked it's now down nearly 60% on the year. This is another reminder that buying individual stocks is a risky business, and that even the biggest players can come a cropper. But what can you do when a stock you own is hit by unexpected bad news?

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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.