Should I jump ship or keep trying to stay above water?

Since May 2007 up until tomorrow morning I have invested $77K (in four accounts; two with margin loans within them and two smaller ones without) and have current margin loans in those accounts totalling $37K. That's $114 worth invested in stocks, with current market value of stocks being $61K. I did well until June of this year, was $12K up at that point but rapidly lost value and now am $50K down as you can see. The loss was due to investment in oil, coal, natural gas, and steel; mostly good companies, horrible losses. As for realized gains/losses, I am actually "green" (more gains than losses - I try not to trade a lot but prefer holding) and these figures represent a lot of unrealized losses or - not sure if I am using the right terminology - loss of stock values by percent right now; my portfolio looks like a lot of "-24%, -30%, -42%" etc. to run down the list but I have not sold; they are just sitting there going up and down but obviously mostly down lately.

Recently and most notably in the last few weeks, I can barely maintain the minimum margin requirement (30%) day by day, having reached that $77K figure by adding $19K in the last two months from what was previously just $58K invested.

My "account value," meaning what would be left it I sold it all right now and settled up the margin loan, is only $24K. What's worse, the money I have gathered up in the last few months to augment my accounts in order to keep ahead of this margin loan, is largely borrowed (so I'll be paying on it for some time to come, either way.) I don't mind paying on loans and I don't mind waiting for years, if that's what it takes, for my account values to rise substantially, but I don't want to lose it to margin call. I can keep gathering bits of $500 and $1000 here and there but not much longer and not more than a few thousand more dollars. The two accounts not threatened by margin loan are valued at only about $8K right now (they are Roths.) I could back the money out of them and use the proceeds to pay down margin loan. Or I could leave them alone as the only accounts not subject to liquidation via margin call.

My instinct is not to sell during a terrible downturn; others say it will get worse, so take the little bit of money left, call it a bust, and run. Should I sell or hold on? I can still eat, pay rent, put a roof over my head - this money is not needed at present, but this represents all the assets I have and invested it for my future and that of my children.

If you don't need the money and can afford the borrowings then the risk though still a gamble may be worth taking - as you are down so much now. Should have jumped shipped weeks ago. Personally I would get out with what you can and invest in property which should be at bargain rates now.

Investing in stocks on margin is a very risky way to invest. It should only be done by highly qualified professionals, not people with little experience. I have been investing for 17 years, and I have never risked investing on margin. I would close down your margin accounts and put the money in a diversified no-load low fee mutual fund.

Look at the stocks you bought to make sure still like them.
It is easier to be diversified with Exchange Traded Funds.
Check what interest rate you are paying.
If you have a high interest rate loan you should pay it off.
If my equity drops below 21429 dollars I will not have the 30 percent required to borrow 50000 dollars.
If I am borrowing less than 50000 dollars my interest rate with Etrade will go up from 6.24 to 7.24 percent.
I would probably stop trading on margin if I can't get the lower interest rate.

At the end of the year you should sell the stocks that you lost money on so you won't have to pay taxes on your capital gains.
Your losses can count against all of your gains and against 3000 dollars of other income.
You might want to sell only enough to put your income near the top of a lower tax bracket.

A single individual without children pays
0% of the first $8,950 of income,
10% of the income between $8,951 and $16,975,
15% of the income between $16,976 and $41,500,
25% of the income between $41,501 and $87,800,
28% of the income between $87,801 and $173,500,
33% of the income between $173,501 and $366,650, and
35% of the income exceeding $366,650.
http://en.wikipedia.org/wiki/Tax_bracket#Tax_brackets_in_the_USA

I suggest that you wait for a substantial stock market rally and sell your stocks when they go up. When a stock is down 30-40%, then you may have to wait a very long time to break even. And it's possible that these stocks would go down even more if you wait too long.

And I suggest that you review your trading strategy and try to improve it based on the lessons you've learned from your experience. When you have big losses like that. Then you must've made some wrong trading decisions.

Perhaps your were too optimistic about the economy. And you need to become more knowledgeable and informed about the economy, before you make any new investments.

The regular news media quite often is not that informative about the economy. They tend to go with the most popular opinions, which are not necessarily right. But there are a lot of financial blogs, where investors and fund managers share their views and opinions about the economy. And although their views are often contradictory. At least you get to think for yourself and choose the arguments that make the most sense to you.

Here are some financial blogs:
http://seekingalpha.com/dashboard/the_macro_view
http://www.safehaven.com/index.cfm
http://globaleconomicanalysis.blogspot.com/
http://www.nakedcapitalism.com/2008_10_05_archive.html
http://abnormalreturns.com/
http://www.financialsense.com/

Sadly, it seems you decided to gamble instead of invest. It looks like you chased past returns and I am guessing you did not assess your risk tolerance and come up with a proper asset allocation including bonds, foreign equities, emerging markets, REITs and domestic equities.

So....now is a good time to start doing that and slowly moving your money around so that you are in a properly diversified portfolio.

This site has links to risk assessment quizzes and tells how to set up a diversified portfolio.

http://www.saveyournestegg.com/diy.html

It may take a couple years to move your money around. Watch out for taxes and don't just jump out of the market (then you've bought high and sold low). Keep your fees very low (Like Vanguard funds) and stay away from brokers parading as financial advisors.

OMG!
lol, i am 11 years old, so i have no clue what you just said! =(

JUMP SHIP! The Titanic IS indeed sinking!

Grap a Snack, Pack a Lunch, Hit the Trails, Enjoy the Views. :)
your welcome. Good wuck wiv the monzey crisisisisis.

YOUR RANDOM FLIP FLOP.
bobalobaa dingdong

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