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Anonymous

18 Apr 2019

Stocks

How do you all deal with psychologically when you see all red on your portfolio?

Even though I know my horizon is in the long term, I cant help feeling stressed/flustered whenever I see a few percentage points swings esp in the red. I get the urge to make trades fast but I resist even though I know S&P long term avg growth is still 7%. Just curious how you guys cope with this in your personal capacity.

Discussion (6)

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Just wondering, is your entire portfolio in red or just a few investments?

I’ve actually 1-2 investment that are like 30-40% down. But my overall portfolio is ok. After checking, company is actually sound, just that I bought it while it was overhyped & overpriced (I didn’t learn enough yet at that point)

Originally, I was quite panicky at well, but soon learnt to ignore it. Of course it does help that the rest of my investments are doing fine. Diversification really does help.

If you are sure the mechanics of the company is ok, then stop checking the stock prices every single day, it’ll help to reduce the stress. This is a “out of sight out of mind“ approach. However, remember to keep an eye out for any news of the company.

One other point is to compare with the rest of the market. If the rest of the market is down. Don’t expect your investment to be up. Just like exam results in school, you always compare with the top kid in class. If their grades drop, you won’t feel too bad if you grade drop a little, right.

Lastly, it'll also helps if you adjust your attitude toward stocks. Before you buy, you need to take a kiasee approach, check this, check that. But at the point you are about to press that “trade” button, you need to be mentally prepared to lose that amount. (So don’t bite off more than you can chew) — just talking about attitude here. I don’t mean you should just let your investment free fall to 0

This is just my personal opinion on how I cope. Hope this helps you.

Since you say your investment horizon is long term,

Always remember why you had the conviction about the stock.

For me, if none of the underlying factors for why I had the conviction has changed, then I might go and understand the reason for the dip. If it's something that I am not concerned about, I won't keep eyeballing the stock price on a daily basis.

Since you are investing for the long term, why don't you just stop logging into your account everyda...

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