A comment about holding on to investments that have dropped in value:
"I invested with a broker I met offering financial education a few years back and am still waiting for the shares to go back up to where they were when I bought them, so I can sell them. Right now they are worth about 1/3 of what I got them at."
We’ve all done it and no one likes to lose money. But the reality we will, and by holding on we actually lose much more than just money. My comments back are these: interesting … that if there was really empowering education going on there would be a couple of things happening… mostly that the whole concept of waiting until the shares go back up is not investing; that that process is really a helpless sort of hope; that waiting until they increase in price again is the prime example of fear of loss; that if a proper exit plan had been taught at the outset of the investment the shares would already be sold; and that when they increase again is not when you want to sell them because now they are profitable. This process described is the far too common emotional reaction people have when they invest without the proper strategy and structure.
As you know MoneyMinding® teaches people how to establish an exit plan before they buy to reduce the emotional roller coaster, and also helps investors address these fears so they are in a position of confidence and control – they are not left with that sick, self-esteem lowering feeling of ‘hoping’ they won’t have to lose their investment and face up the reality of their situation.
It’s quite a mess really – totally messes with peoples confidence. It will happen – It’s just sad, that the proper structure and systems we’re taught earlier so investors can become empowered throughout the investing process, not the other way around. There are ways to address the situation now, rather than the ‘waiting for Godot’ syndrome. There is a free article on the MoneyMinding® site called ‘my investments are down, now what?’ that offers some thoughts and lots and lots on this subject in the ecourse.
And also, a couple good questions to ask are: what is the strategy for if and when the shares do go up; and what they are gaining by waiting?
Copyright© 2006 Tracy Piercy, CFP
Written permission is required for reproduction. Thank you.
We’ve all done it and no one likes to lose money. But the reality we will, and by holding on we actually lose much more than just money. My comments back are these: interesting … that if there was really empowering education going on there would be a couple of things happening… mostly that the whole concept of waiting until the shares go back up is not investing; that that process is really a helpless sort of hope; that waiting until they increase in price again is the prime example of fear of loss; that if a proper exit plan had been taught at the outset of the investment the shares would already be sold; and that when they increase again is not when you want to sell them because now they are profitable. This process described is the far too common emotional reaction people have when they invest without the proper strategy and structure.
As you know MoneyMinding® teaches people how to establish an exit plan before they buy to reduce the emotional roller coaster, and also helps investors address these fears so they are in a position of confidence and control – they are not left with that sick, self-esteem lowering feeling of ‘hoping’ they won’t have to lose their investment and face up the reality of their situation.
It’s quite a mess really – totally messes with peoples confidence. It will happen – It’s just sad, that the proper structure and systems we’re taught earlier so investors can become empowered throughout the investing process, not the other way around. There are ways to address the situation now, rather than the ‘waiting for Godot’ syndrome. There is a free article on the MoneyMinding® site called ‘my investments are down, now what?’ that offers some thoughts and lots and lots on this subject in the ecourse.
And also, a couple good questions to ask are: what is the strategy for if and when the shares do go up; and what they are gaining by waiting?
Copyright© 2006 Tracy Piercy, CFP
Written permission is required for reproduction. Thank you.
posted by Tracy Piercy at 9:49 AM
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