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How do you lose a complete $100,000 portfolio?

It’s not the simplest process on this planet, however it may be achieved.

As shares like Enron and Worldcom present us, if you happen to throw all your eggs right into a fraudulent basket, you can also make nearly limitless quantities of cash go to zero.

So, it’s definitely potential to totally destroy a $100,000 portfolio. The laborious half is figuring out the sorts of shares that can do it prematurely. On this article, I’ll share two shares that might totally destroy a $100,000 portfolio, beginning with one of many greatest reverse-success tales in Canadian enterprise historical past.

Cover Progress Corp

Cover Progress (TSX:WEED) is an organization that when appeared to have all of it. In 2018, the 12 months when hashish was legalized, this hashish firm was driving excessive within the markets, securing $5 billion in investments, and about to see its income enhance dramatically. Cover Progress had the wind at its again.

Certainly, instantly after the Federal authorities legalized hashish, Cover Progress Corp did appear to be doing effectively. Its income elevated as anticipated, and it started opening retail shops in provinces that allowed it.

At this time, the inventory is down 99% from its all-time excessive.

What has occurred?

Put merely, Cover has didn’t make cash. It has misplaced cash yearly because it hit its all-time excessive, burned by means of virtually all the $5 billion funding it acquired, and even seen its income decline. On high of all that, it has taken quite a few write-downs attributed to 2017-2018 investments that ended up going nowhere. At this time, hashish is a commodity, with many firms supplying all of it throughout North America. It seems unlikely that Cover Progress will recuperate.

Algonquin

Algonquin Energy & Utilities (TSX:AQN) is a inventory that seems to have all of it on the floor. It has a excessive yield (4.05%). It’s in a “sizzling” trade (renewable vitality). It’s rising (by some metrics). What might there be to not love right here?

Sadly, fairly a bit.

Whenever you take a look at Algonquin’s dividend observe report, you see many indicators that Algonquin is being mismanaged financially. Over the past two years, the corporate has reduce its dividend not as soon as, however twice. Regardless of the cuts, the inventory nonetheless has a comparatively excessive 78% payout ratio. Its earnings are presently down from their 2018 excessive, although improved from 2024. Principally, this firm has all of the indicators of a high-ish dividend payer that must reduce its dividends once more. When recognized dividend shares reduce their dividends, their shares are inclined to take successful, as a result of the cuts signify that there’s something mistaken financially. For now, I’d avoid Algonquin Energy & Utilities inventory.

Silly takeaway

It takes a lifetime to construct a portfolio, however only one unhealthy commerce to break it. Not all shares are assured moneymakers. If you happen to choose a foul one, the restrict to how a lot you may lose is theoretically -100%, however as Cover Progress Corp and Algonquin Energy present, there isn’t any restrict to how a lot punishment an organization can topic its shareholders to. Keep away from shares like these, and also you’ll do effectively.