Is there something better you can do with the money?
As an investor, you should ALWAYS be seeking to allocate your money to the assets that are likely to generate the HIGHEST RETURN RELATIVE TO THEIR RISK.
There is no shame in selling a somewhat undervalued investment - even one on which you've lost money - to free up funds to buy a stock with BETTER PROSPECTS.
Here is what one investor did.
In early 2003, he noticed that Home Depot was looking awfully cheap. The stock had been sliding for almost three years, and he thought it was worth about 50% more than the market price at the time. He didn't have much cash in his account, so he had to sell something if he wanted to buy Home Depot. After reviewing the stocks he owned, he sold some shares of Citigroup, even though they were trading for about 15% less than what he paid for them. Why? Because his initial assessment of Citigroup's value had been too optimistic, and he didn't think the shares were much of a bargain any more. So, he sold a fairly valued stock to purchase one that he thought was very undervalued.
What about his small loss on the Citi stock? That was water under the bridge and couldn't be changed. What mattered was that he had the opportunity to move funds from an investment with a very modest expected return to one with a fairly high expected return - and that was a solid reason to sell.
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