Expert: Steven Taylor - 6/13/2010

Question
I invested a substantial proportion of my assets in CYR - Cirrus Energy Corporation based on a recommendation from a family member. I didn't do my due diligence, and the stock went from $3.15 to $1.20. I learned my lesson about not checking out companies properly, but what should I do about this stock? It is in a direct investing (non-RRSP account). Should I sell it? Should I move it to my RRSP? Do you think when the BP situation clears up it might go up? Thank you for your advice.

Answer
Suzanne, I cannot give you specific investment advice. I don't know enough about you or your financial situation to be able to accurately advise you of any course of action.

I don't follow Cirrus closely, but as a Natural Gas producer, they have been knocked down along with most other gas producers. The price of gas is low, and probably likely to stay low until the world economy begins to recover and industrial demand trends higher. Since Cirrus is still primarily at the exploration phase, exploration success has a lot to do with the stock price. That makes them much riskier and more volatile than those companies more tied to production.

In terms on the stock, I think you need to evaluate the current and future prospects of the company versus the downside risk from the current price. Also, if you were to sell the stock, what would you do with the money and does that investment give you greater chance of return (and/or lower risk) than you current investment?