I have 4 or 5 stocks that have just absolutely plummeted over the past year. Down like 80% each. Yes I should have gotten out long ago, but I was distracted by life, and I did not. So here we are. And now I'm wondering what I should do, if anything. I am holding on to them hoping they will go back up eventually and I can at least break even. Probably another rookie mindset, they might never. And they have not moved for several months. I'm wondering when an experienced investor would throw in the towel, accept the losses, cash out what you have and re-invest elsewhere. I might be able to make some of it back with other securities. Or hold on hoping they will go back up? What would an experienced trader do? What is the school of thought on this predicament? I know this is kind of vague and obviously I'm a novice investor, and it's really up to the individual and their plans. But I could really use a few examples, case studies, advice, etc. Thanks very much
I guess first....what are the stocks? Is your "HOPE" for them to go back up realistic? If not....are you going to lose even more of your money? How much money are we talking about at the current value?
I will share my opinion. My opinion is based on a value investing approach so it is not fact. The idea of hoping to get your money back and get out is very poor investing behavior. It is an instinct many people have but a mistake. If the companies are well run and likely to do well, you should want to own them more now at the lower valuations than you did when they were 5x current market caps. If the companies are not well run and you are concerned about them failing or perhaps just about their ability to do well in the future, it's best to get out. A well run company is more likely to 5x than a poorly run company, to say the least, so getting your equity into a well run company is a better idea than hanging on with grifting jerks of existing companies. Perhaps most important is your fixation on stock price. Very few people can see beyond the daily ticker changes and look into the value a company brings to market. If you were to learn this ability, the choices would be clear and 95% of the anxiety would be gone. Buying a stock because you're "pretty sure it's going to go up" has never been a path to success, just as selling because you're "pretty sure it's going to go down" has also been a rocky road to walk. We all started there and extreme few move on from this level of thinking so my opinion is an outlier on this. For me, the path to success has been in identifying good management behaviors, as well as bad management behaviors, and trusting my nest egg with people who I feel are working hard and doing a good job. This is what I trust. I do not trust the market to properly value companies. In fact, I appreciate the market's myopia because it has brought many values to me over the years. I wish you success with your portfolio, whatever you decide.
Welcome to the forum. I think TB16 brought up some good points to evaluate in his post. You mentioned in your post...."should have gotten out long ago." This sort of tells me you would not hold this particular stock/company today if given the opportunity to buy it at its current price. In other words, would you invest in this company today based on your research if you did not currently hold it? As you mention, sometimes life just gets in the way and stuff happens. Don't beat yourself up about it and paralyze yourself to the point of not being able to work through it. Sometimes it is simply a matter of deciding and moving on. Maybe frame it this way. Am I holding on because I believe in the company/stock or am I holding on to simply avoid a loss? You mention "trader" in your post, so maybe it wasn't supposed to be a long term hold to begin with. Anyway, just some ideas to consider and think about.
