Bad Investments From Being Emotional


Ever been to that phase where you seem to be stuck in your negative portfolio and as we commonly term it “ipit” would be the best description you can say about your situation?

Baby cat

In my humble opinion, the past few weeks has been a good time to invest specially those who have cash and those who were able to take profit. The stock market has been moving sidewards for the longest time(in my personal state). I have two online stock brokerage account and sad to say I have been in the red for some months now. And if you also notice this is my first post in months. I apologize for that.

Why bad investments?

Let me tell you a little story.

A year ago I decided to come back home from my overseas work for so many reasons(sorry can’t detail them here :) ). I was thinking things were going okay and with the Philippine stock Market making record highs one after the other I did cash in and positioned my self to the expected massive correction. Lots of us thought it was in March of this year but it did not happen. I did buy some stocks and was able to make a decent profit out of our wrong expectation. Then the correction came and we were hoping that the market will get back up again just like the year before, it was May and it never happen. The market continued to slide and the dream of the PSEi at 8000 died.

The worst came afterwards when on top of the other things that I am going through another thing came in. My depression started to take over me and the more I became easily irritated and emotional. With such emotional state I made some wrong decisions not only my personal life but also in my stock investment.

Thus the saying is true:”Don’t make decisions when you are emotional”

The damaged is done. So to date I am still in the recovery/healing phase. I could easily sell my stocks right now and instantly have a huge loss wiping out all my earnings for the past 3 years. Also right now I am seeking an approval from my condo rights to be sold since I have no job right now and I won’t qualify for the in-house housing loan.

But amidst this chaos in my life I am thankful that at least I have set aside emergency fund to temporarily keep me afloat while struggling to survive. Until when will my emergency fund save me? Not sure with all the things that has changed in the Philippine economy.

I am starting to recover but it is still a long way. But as they say you wont get out of the dry well unless you shake off the dirt and trample on it. I have to let g of so many things and put them behind or in our analogy underneath me and use them as my stepping stone back to where God has intended me.

Why am I sharing this?

The Philippines has gone to many tragedies lately and I know we need to hear uplifting words to help us move on.As I borrow some words from Bro. Bo Sanchez and other preachers: Yes it is right to acknowledge your hurt or emotions, you got to face them and feel the pain. But such pain should not stay long or else you get stuck in it. You got take action, you got to let go of the past and move on. It might be painful but the first steps are the crucial steps that will forever change your life.

If you portfolio is deep red now act on it. You might be able to cut loss now while your losses are still small. If your too late you got to make the painful decision so that you can start anew. Remember to don’t make investment decisions or any other life changing decisions when you are emotional. Let it pass and hope you have  a clearer mind afterwards.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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2 comments for “Bad Investments From Being Emotional

  1. November 6, 2013 at 11:28 pm

    Hi Louise, what you wrote above is true, the bottomline is: 2hindi ka nag-i-isa” with your experience. We are on the same boat. I, too, had experienced financial loss with my past investments, some few thousang bucks. The good thing is — it does not deter me from trying again. As the saying goes, “never give up”. All of us are in the school of investing, we lost, we gained. I believe there is no such thing as “bad investment”. It only becomes bad when the thing we expect did not come to our favor. Let us remember our losses is a gain for the other party. Investing is a transfer of wealth from us (we) to others or vice versa. To remain a constant gainer is impossible, neither to be a constant loser should be avoided. I think investing is like being a good skrimador (sword playing). Thanks for sharing. All the best.

    • November 9, 2013 at 12:38 pm

      Thanks Ruvilnam. Tama we should never give up. We have a long way to go and greater lessons to learn and a a greater mission/reason to do that is why we go to such troubles and pains to mold us for whatever is there for us.

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