Losses: How Do You Handle Them?

What are you like when it comes to taking a loss? I find it easy to take a profit, but hard to take a loss.

If you are locked into a struggling share, then the usual advice (after the event) is to take an early loss and put the money where it’s more likely to grow.

The alternative is to sit there like a rabbit caught in the headlights praying for a miracle that might not come. Or if it does you might have a long wait.

The flaw in the first piece of advice, is that a person who gets themselves into this position, is just as likely to find themselves in the same position with their next best guess.

Whereas the second piece of advice will at least keep them out of further trouble and preserve the funds they have left as long as the share doesn’t dip again. And of course it might recover if the conditions are right.

It’s a soul destroying position to find oneself in, and it all stems from the inability to correctly read the index and the market in the shares you are trading.

You would probably be better off putting your hard earned into a unit trust.

Even then, your timing can be disastrous.