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Anonymous
Anonymous asked in Business & FinanceInvesting · 1 month ago

How do you go on after making terrible stock picks?

Back in late January I bought 3 shares of Costco for $364.22 and 4 shares of salesforce for 226.17, now Costco is down to around 316 and salesforce 202. I really thought these were good companies, but their stocks are dropping, and my hard earned money is going with them. I just feel like an idiot for choosing them, and how don't know how to forgive myself for such stupidity. My question is from your own personal experience how do you move on?

22 Answers

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  • ?
    Lv 7
    1 month ago
    Favorite Answer

    You must ask yourself if you have the temperament to be investing in stock.  The nature of the stock market is that you accept higher risks in anticipation of higher returns.  Part of the higher risk is the possibility of making a losing trade.  The way investors mitigate their risks is be diversifying in a variety of stocks.  An inexperienced investor can be successful long term by investing in index funds, which in turn invest in a wide assortment of stocks.  If one stock goes down, the others might go up to limit the risks. Warren Buffet stated that you should not be in the market if you cannot tolerate a 50% decline in your portfolio in the short term.  I was down 30% in 2008 only to make stellar returns in 2009 and beyond.  I never lost money, my portfolio just showed an unrealized loss in the short term.  Those who panicked in 2008 and abandoned the stock market, lost money and failed to receive the effects of the stellar recovery.

    The stock market should be considered a long term investment.  Your stock picks may not be bad picks.  In the short term they are down, however, in the long term the stock may go higher.  Just look at the trend of the overall stock market.  On the average, the stocks go up.

    When to sell?  If you don't need to cash out for the money, you sell the stock when there is a better stock to buy.  You don't have to sell the stock you are in at a loss, you can hold the stock.  However, if there is a more promising stock to buy, or if you want to invest in an index fund to diversify risks, sell the stock and move the money to the better investment.

    In terms of your emotions, you must accept the fact that the past is gone.  Worry and regret have no useful purpose.  They only create emotional distress.  What really matters is what you do next.

    A lot of long term investors have built their wealth by investing in the stock market.  It would be regrettable if your recent short-term experience scared you off of the stock market.

  • 1 month ago

    When I buy a stock my hope is I leave it to my nieces and nephew so a temporary downtrend just makes adding to the position cheaper. I have some growth stocks but most of my portfolio are dividend payers, by focusing on growing my dividend streams over the current value of my portfolio (which I don’t plan to sell anyway) and setting short term goals of amassing x number of shares in whatever stock I am building a position in in each account puts me in a mind set of being a buyer in sell offs and a more modest buyer during market peaks. 

  • 1 month ago

    As Edward Says, and yes diversify, slowly, 

    Or a ~(Corporative Union) an 'amalgamated fund',   ~ 

    in UK cooperatives or building societies .....Don't go for bank offers. ~and banks sometimes: sell or buy their own first. ...Yes Hedge your Bets, But that's not like saying By Ford or By Mustang~~~Pick two industry's where one leads and the other Laggs, or visa versa.,Keep track of the annual company reports..Finally: pick between Bonds or Shares..

  • ?
    Lv 4
    1 month ago

    Just be glad you didn't gamble it at the casino or spend it on the lotto

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  • hamel5
    Lv 7
    1 month ago

    They are good companies.  And, you  haven't lost money until you sell.  So, chill out and as other posters have suggested - the next time you buy - get a few shares of a nice Vanguard mutual fund 

  • 1 month ago

    I don't know why you are only buying a few hundred dollars at a time. It makes no sense in terms of fees and absolutely no sense in terms diversification if you've only got a few thousand dollars. This is where putting the money into a fund makes more sense.

    Surprisingly, Costco seems to be one of the brick and mortar retailers that have stock prices that are behaving normally by cooling off. There's no reason why the pandemic would justify such a large price increase. I'm also guessing you never bothered to check the statistics to see whether or not the stock is actually cheap. Costco's business model of having loyal shoppers pay to enter as their primary source of income gives it an edge over other retailers. It's a mature company you buy to hold on to the long term to collect dividends and the occasional special dividend when Costco has more than enough money on it's books.  

  • ?
    Lv 6
    1 month ago

    how do you think , most who invest in stocks have it in a lot of companies , some go up while the others go down , its called diversivevying , not just one stock .one goes down but the other compensates for it .

  • kswck2
    Lv 7
    1 month ago

    Investing in stocks should ALWAYS be for the long haul-like Years. 

  • Eva
    Lv 7
    1 month ago

    If you did your due diligence and still believe that the companies can rebound, stay invested.  A loss is only a loss when you sell.  People looking to make a quick buck often get burned.  Since you didn't have a lot of money to invest, you might have done better to invest in an ETF instead of individual stocks. If you are going to be checking the stock(s) every day and being very nervous when they drop a little, the stock market may not be where you want to be invested.

  • Anonymous
    1 month ago

    Many people think Costco IS a good stock to own.  

    If you are going to buy at an all-time market high and then fuss about what happens to the stock price over a two month period, you have no business investing in stocks.

    Do you think Costco stock will be worth more in ten years?    How much more?    Do your research and then make a decision.   And then stop watching it on a daily or even weekly basis.   

    If something about the company's fundamental outlook or financials change, you can then reevaluate your decision.   

    Stop being so emotional.   That's when you make stupid decisions like buying high and selling low.     Use that round lump three feet above your a s s and stop having such a short-term perspective.

  • 1 month ago

    does costco still exist?

    yes

    do they still pay dividends on profits

    yes

    but that was not enough for you.... you brought the stocks as a short term gamble, hoping to sell them as soon as the price increased

    so, for that, my only advice is... dont gamble money you cant afford to lose

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