Most of my portfolio was invested in oil and energy related stocks. I don’t want to sell and take this big of a loss. What should I do?

I have seen this on numerous occasions recently. I also wrote a couple of articles on this very topic in the past. My first response would be why were you so overweight one area of the market? When certain areas of the market have extended runs, it always pays to go back and reevaluate your holdings. Energy became a significant part of investors’ portfolios over the last 5-10 years. Many retirees have fallen into this trap. The reason being that they needed income to live on during retirement. Traditional fixed income investments were not providing the income that these investors need to live on, so they went in search of yield and found it in oil and energy-related investments. The only problem is that these yields were dependent upon higher oil prices. Oil has been cut in half over the last few months. Many of these investments have also been cut in half. Now the thought of selling at these levels can become an emotional task. There are two emotions that drive the market, greed, and fear. Greed drives the price of an investment up and fear knocks it down. There is one problem with this. Making investment decisions based on emotions almost always works poorly. There should have been proper diversification and asset allocation to prevent this from happening, but the past is the past. You need to reevaluate all your holdings and look at each company and its balance sheet. Sell the one’s that won’t be able to survive with oil at $50 a barrel. The big boys will survive but these smaller high yielding investments won’t be around over the long haul.