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Trading and Investing Lessons from TabStocks Experts
28 Jan 2022.
You’re losing money – what can you do?
Your investments are falling. The prices of the stocks or crypto you invested in are down and maybe even still falling. You’re losing money.
You can’t buy more at these lower prices because either you have run out of money or you are scared that they will continue to fall and your attempts thus at averaging down to lower your overall average will be a waste of time.
And in the back of your mind you fear you might lose all of your money, if what you invested in ceases to exist.
On the one hand, it’s good that you are thinking. It shows you care about your money and what you have invested in.
On the other hand, many people new to investing, over think and draw in too much emotion. This emotional behaviour clouds logic and causes you to panic sell.
Once you have sold at a loss you cannot recover that loss. It’s gone forever!
In my view it’s better to hold on to your shares and cryptocurrencies, even if it takes years to recover, then so be it.
It’s wise not to pour all of your money into one stock or one crypto. Think long term, and think about investing on other stocks and cryptos regardless of whether you’re losing money because markets are down.
Diversify into different sectors and pick a range of penny stocks and mainstream top stocks we all know about.
Also, think about dividend paying stocks to add to your portfolio. In the long term, especially if you’re in your early 20s those dividends will add up and you can reinvest dividends thus buy more shares in the same and or in other companies.
Sometimes when you have bought at high price, maybe during a bull run, and the market has turned on you and everything is falling, it’s best to sit back, relax and let it all happen. After all without lows, without bear markets there can’t be bull runs and recoveries.
The bottom of the ongoing bear market crash must occur and this sometimes takes weeks, months if not years. So plan for the bottom.
If you have more funds or can save, then the best time to buy more is when people have stopped talking about the falling price and that the price has settled at the bottom, maybe going sideways for a while.
This is the best time to buy the lows. It’s similar when wanting to short at the very top of the highs.
In stead of mopping up the mess, allow the leak to continue because you can’t stop the flood. The leak will stop when it stops.
Plan for when it stops rather than being drawn in to the fears of the masses, those inexperienced traders and investors out there.
If you don’t have access to more funds then the best investing strategy is to hold on. As a stock or crypto fell by so much, it can also rise that much and even more, higher than what you paid for it.
Remember why you bought it when you did. You did your research and you believed it was going to go higher because of xyz. So focus your mind on the positives of why you invested.
You was not wrong, it’s just that it’s not the right time for it to be at the price you expected it to be at.
This is not to say that it will reach that price range for sure. Anything is possible and the company could go bust. But on the whole, assuming it doesn’t then it’s likely its time to rise again will come.
When you build up your portfolio of stocks and other investments, there may be stages where you are down a certain percentage.
But overtime you could be up in profit by the same percentage if not higher having first recovered from previous losses.
It’s important to invest in a range of stocks, moreover growth stocks and stocks likely to multi bag, albeit in a short time spike.
If you play it right, you can sell the spikes thus taking the profit and invest part of that money into more growth stocks.
When Warren Buffett started out in investing, he traded penny stocks, buying ones he thought would rise a lot, then he sold them.
This strategy increased his bankroll. But it’s not a long term strategy that will give you the best and the highest long term profits and income.
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