Dealing with Losses Positively
It is always easy to look at any investing decision from hindsight. When we hold off on buying a stock or sell a stock at the wrong time, it can feel crappy when looking at the loss. Every investor will somehow face losses in one way or another when the stock market indexes slide $Dow Jones Industrial Average(.DJI.US$, $Nasdaq Composite Index(.IXIC.US$, $S&P 500 Index(.SPX.US$ or stocks tank for whatever reasons. No investor will escape losses, but every investor can decide how to handle the losses in the moment and rebound later on.
When I bought stocks like $Alibaba(BABA.US$, $DocuSign(DOCU.US$, $PayPal(PYPL.US$, $Sea(SE.US$ at higher prices, I did so as the past information was not the same as the present one. The reason we can look at hindsight is because new information presents itself since the earlier buying decision. Making mistake in investing is not unusual. Even the legendary investor, Warren Buffett made heavy losses as well including buying airline stocks right before the pandemic and selling them at their lows in the midst of the pandemic. Mistakes are inevitable and come often in the stock market. But if we adopt a positive mindset by focusing on opportunities, our gains will eventually overtake our losses.
Every investor has a different set of criteria. Some would have missed the enormous run-up of high growth stocks $Alphabet-A(GOOGL.US$, $Amazon(AMZN.US$, $Apple(AAPL.US$, $Meta Platforms(FB.US$, $Microsoft(MSFT.US$, $Netflix(NFLX.US$, $NVIDIA(NVDA.US$, $Tesla(TSLA.US$ as they do not fancy the tech sector. I do not embrace a certain investing strategy just because someone else is making huge returns from it. Instead, I have created a set of criteria for my own investments and followed them closely. If I have acted in accordance to my criteria when investing and yet make losses, I understand that I should accept the loss. Having a longer investment time horizon, I prefer to buy and hold good quality stocks and would not sell stocks like $Apple(AAPL.US$ even as it slipped from its historical high recently.
As far as possible, I try to avoid making comparisons with others on $Futu Holdings Ltd(FUTU.US$ moomoo. While it is easy to compare each investor's total returns or returns on any stocks, it is crucial to understand that every investor has different investing goals. I do not have the risk tolerance for speculative stocks that I barely understand and I avoid timing the market which is extremely difficult even for experienced investors. The only person I should compare returns to is myself. I always strive to make myself better rather than trying to keep up with others.
Life is too short to worry about losses in the stock market. Investing should not be stressful and it helps to take some time off without looking at my portfolio or even making any investments. I do not spend all my time monitoring the stock market or worrying about it. I try to relish life and not take losses too seriously. Investing is a long term journey for me and from time to time, I will retreat and take a break and step back again when I am ready to give it another attempt.
$Advanced Micro Devices(AMD.US$
$American Express(AXP.US$
$Bank of America(BAC.US$
$Block(SQ.US$
$Coca-Cola(KO.US$
$Costco(COST.US$
$CrowdStrike(CRWD.US$
$Ford Motor(F.US$
$Micron Technology(MU.US$
$Nike(NKE.US$
$Pfizer(PFE.US$
$Salesforce(CRM.US$
$Shopify(SHOP.US$
$Snowflake(SNOW.US$
$Visa(V.US$
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HuatLady : In trading it is useless to cry over "spilled milk" when you have made a mistake. So why not take it as another new challenge in life and learn from the mistake?
不理不理左不理 : Good write up. It’s not productive worrying about your losses. Trade wisely and if you make losses, do not dwell over it for too long. Instead, remediate your losses by compensating with other performing stocks. Remain positive and keen!
RustyDog : The right kind of investing mentality like yours will bring your great success for your investments in the long haul.
PeaceLoving : It’s really encouraging to see that you can cope with losses in such a calm manner. Have so much to learn from you rather than just let fear overwhelm me when the market is bad.
jasonleett : Yeah, one of the key traits of a good investor is managing ones emotions, regardless how the the trades turn out.
Fear and Greed are 2 emotions every trader cannot avoid in their trading journey. Only when I manages his emotions well can they recover from a setback and start afresh, without allowing the fear from previous trading mistakes to impair their future trades...
FBI888 : It's very well written! I don't know what to do.
No one can make mistakes, no one will be right every time, face them positively, accumulate experiences and lessons, and make better preparations for the future.
苹果万能 : Yes, everyone's heart is the same, invest want to make money, lose money on the heartache, I am also the same, slowly in the study, everyone refueling. Win over yourself, but also over money. I wish you all the best for a successful investment.
桐原少年 :
桐原少年 : That's a good point. Thank you.
HuatEver : I agree that investors have different values in trading. Your attitude of adopting a positive mindset in your investments is admirable.
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