Inertia, depression or blind hope.

Which is your reason for hanging on to stocks that have been smashed to smithereens in the past year or so?

Nortel Networks, JDS Uniphase, Research In Motion, Microcell Telecommunications, Certicom -- all of these widely followed stocks are down 80 to 90 per cent or more in the past year. If you're hoping for a rebound to make back some of your lost money, there are some
sobering numbers you should be aware of.

To get back to even, a stock down 80 per cent would have to surge 400 per cent. A stock down 90 per cent - hello Nortel -- would have to rise 900 per cent to get back to where you bought it.

These numbers were supplied by Adrian Mastracci, a Vancouver investment counsellor and financial adviser who has created what he calls a Table of Discomfort.

Are you down 10 per cent on a stock? No big deal - you just need to make 11 per cent to get back to even.

Your loss is up to 20 per cent? Then a gain of 25 per cent would bring you back to even. That doesn't seem too bad, as long as you've got a long-term horizon.

From here, though, things quickly deteriorate.

A 30-per-cent loss means you need to make 43 per cent. Lose half your money and you need a 100-per-cent rise. Lose 60 per cent and you need a 150-per-cent gain. We've already seen the virtually impossible performance a stock must deliver to make back even larger losses.

"So how many of these miracles have you experienced?" Mr. Mastracci says in his newsletter.

Maybe you've lost all hope that your losing stocks will recover, but you can't bring yourself to sell because you're too depressed about it, or you're in denial.

Whatever the reason, now's as good a time to snap out of it and take out the trash in your portfolio. Then, you can use the proceeds to fine-tune your portfolio so that you're in good shape to meet whatever the future holds.

Once you've decided to sell, the question with respect to non-registered investment accounts becomes how to deploy the losses you've suffered.

It has to be said that investment considerations should take precedence over tax matters when deciding what to do with a losing stock.

If your investment losses aren't enough to persuade you to sell, then ask yourself whether you'd buy the stock today if you had fresh money. You might want to actually buy more of a stock that you still like.

You might also ask yourself whether a troubled stock's fundamentals have changed, maybe because competition has increased or growth has slowed.

Still another consideration is whether your portfolio is out of whack in its ratio of stocks to bonds and cash. If you're entirely in stocks or close to it, selling your losing investments to buy bonds would be a smart move.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.