Nope, I just made up that name for the feeling or inner trouble a new stock investor goes through when his or her stock pick did not give back the expected results. After carefully planning and practicing with the stock trading game, it makes you feel down and beaten when after a couple of days or weeks your stock is still at the negative. Worst is when every week in goes down further and further.
Well cheer up because I’m sure every one went through it.
At times we only see the short term of all and not looking at the long term or we only look at one stock instead of the whole portfolio .
Based on Bloomberg.com’s chart the PSEi grew year to date about 21.48%. Yes from January 1, 2012 to present that is the PSEi’s growth and that’s the reason why you are hearing here and there that the Philippines is one of the strongest economy in the Asia-Pacific if not the world.
So how to deal with this Newbie Disappointed Syndrome?
1. Look at the positive side of the negative.
2. Hold on until it turns around.
3. Decide when to cut loss.
Look at the positive side of the negative
Yes one must have a wider horizon in looking at your red portfolio. First thing is August is usually the Ghost month and in general PSE is quiet or even flat. Without activity or volume it is natural to have a stagnant stock price(going sideways) or a slight drop in price due to lack of demand. So be happy because it means stocks are cheap or selling on bargain thus a good time to cost average.
Hold on until it turns around
Always remember that the stock market is like a bouncing ball, it goes up and down. As the ball goes down it actually collects energy so that when it hits rock bottom it creates an upward momentum which could even go up to a new high for PSEi. So if you are not in need of money immediately why not hold on to your investment who knows come September those who have not traded will make a huge comeback.
Decide when to cut loss
Again if you cant take it you should cut loss as early as possible to find better stocks while they are at a bargain price. You should have made this limit already before even buying the stock. Once it reaches your cut loss level you should make that decision so that you wont be lingering much on the negative but rather move forward to make a better stock pick.