Asked on 06 Jul 2018
Wrong Purchase - lesson learnt. It depends on the item value and why I purchased it in the first place. Refund? Resell? Suck it up?
Stock - revisit why you purchased it in the first place. Paper losses? Price fluctuations? Do you believe in your thesis?
I think this is what we call sunk cost fallacy. I would prefer to write it off and move on. because i find it i can't focus if there something behind my mind whether i should sell it or not. So thats how i deal with it.
Treat them as 'tuition' fees, move on from the mistakes, and learn the lessons. Everyone makes mistakes but they don't define you for the rest of your life. Pick yourself up and make the best from there onwards.
Learn from these mistakes, they are your most expensive lessons
If the stocks you are investing in is a strong companies with strong management, you should not be so afraid as it will come back when the economy becomes better. If it is from gambling or wrong purchase decision, then you just have to accept it and move on and hopefully you can learn from your mistakes.
If the monetary loss is due to circumstances not within my control then I'll accept it and move on. E.g. gambling. But ofc there's a need to know when to stop.
But if I can control it, like stock investment (in terms of doing my research and due diligence), then I'll question myself what went wrong, learn from it and strive never to make the same mistake again.
When o.k. as to cognition, we can be seen as 'rational' and thus are responsible for all we do. When we invest we should be well informed about the associated risks. When we fail, we could learn from failures.
Losses still could be 'book losses' (unrealized losses).
After all it is still only money (= material), how so much more important should be to us instead health, wellbeing of our families.
So: no problem at all, when we only loose our money (and do not put under pressure other persons with our losses).
When it comes to monetary losses, you might be angry, upset, frustrated, blaming everyone and yourself, but once you calm down, you need to know and understand why do you lose money in those scenarios you listed.
After understanding what when wrong, make it a point to learn from these mistakes so that you will not repeat them again. But if you do repeat the same mistakes (which many of us do), please really try harder and make it a point not to repeat it too often. Also make it a point to increase your knowledge.
And the last thing you really need to do is to move on. No point harping on the mistakes. Look forward and never give up.
That's part of the learning process in investing. Infact, this makes me realise that i need to learn more.
Understand that it is a "wiser choice" to minimise sunk cost as early as possible, then you will feel better
Everyone knows that the chances of winning is not high and it does highly depends on luck. So pre-condition yourself not to feel sad about losing gambling money
Wrong Puchase Decision:
It happens, resell it or give it away (can consider as a charity act :p )
Accept it, learn from the mistake and move forward... What's done cannot be undo.
Accept it and move on. Learn why it happened and take it as a course fee.
I suscribe to this mental thinking for moving forward.
Look forward to what can be done now. Instead of lamenting the lost. Sunk cost (lost of money) can't be reversed. Same for doing business. Look to cut losses, change position, change mentality, revamp your system (never to gamble high or over leverage).
A movie ticket of a poor movie is just that. Why spend time to watch it (er ok I paid for is so?), when the time spent could be better utilised on other aspect of your life. (instead of watching movie, why not spend time with family and friends since the movie sucks).
Losing money is part of the game. I truly believe you have to lose money to make it back. What goes around come around.
Every lost you will gain a practical experience that you can truly learn from and have this as your edge when you invest or trade the financial markets in future and come back stronger!
Always keep a positive mindset and learn to control your emotions and psychology.
Investing is 20% strategy and 80% psychology.
Learning how to control your psychology is half way to success.
Accept the loss.
Find out why you made the loss. Learn from your mistake. Think back what were your thoughts and emotions when you execute the order.
Improve your knowledge and skills. Train up your psychology and emotions.