The stock market always has the opportunity of profit and the risk of loss exists. Revenue is an opportunity and loss is a risk. Of course, not only stocks, but also all kinds of investment products such as futures and options all have a certain profit opportunity and risk of loss coexist.
Most individual investors want to increase their assets to invest. And they check the charts from time to time because the fear of the asset decrease. Maybe it’s an investor’s mind.
In the early days of stock investment, we experience various investment losses or enjoy the joy of realizing profit. Most individual investors, however, rationalize themselves by saying that they will all learn to experience investment losses or profits. And they think increasingly speculative and dangerous investment.
What would happen if you invested 1,000 dollars in a corporation and a 10% return on investment would result in a profit of 100 dollars? Ironically, they are not satisfied with the revenue of 100 dollars. If you invested 10,000 dollars instead of 1000 dollars, you would think that you would have 1000 dollars. On the other hand, I think that if you lose investment money, you should have to less investment. And you rebuke yourself.
However, both the investment gains and losses are caused by the “I” who made the investment decisions. Many people forget this fact and pour all their resentment on something else. And you are getting more and more confused and unable to respond properly. In the end, such thoughts and actions create situations in which they themselves become problematic.
Many individual investors simply wait for the possibility of spending time on their own, or turning to investment returns, when an investment money is lost. However, this is an investment loss response method that should never be done.
In the event of an investment loss, efforts must be made to identify the cause of the loss. If you do not find the cause of the loss and spend your time alone, you will not be able to respond even if the stock price continues to fall, resulting in a higher investment loss. Watching the growing investment losses is of no use. When an investment loss occurs, you must make a lot of efforts to identify the cause and fix the investment loss with a decision that suits the cause.
Understand the Cause of Investment Loss
If the price of my stock falls sharply, I need to look at the background and the cause first in the market. If you find out what the problem is through the company’s disclosure or news, and if you can not find the cause in this process, you should analyze the situation. Sometimes, through bold imagination, you must try to understand the cause.
Once you have some success in identifying the cause, you decide whether to wait and find a new breakthrough. If you think that it is a problem that can be solved if you wait, you have to decide whether to set up additional investment or just wait for a profit conversion opportunity.
However, if it is not a problem that can be solved naturally over time, you need to boldly stop. If a company is severely hit by financial hardship, it can not be restored to its original share price over time.
Equity investment is like looking for bananas in the jungle. Before entering the jungle, many people think that they can easily find bananas. But it is not easy to go into the jungle and actually find a banana. And even if you are looking for a banana, you need a lot of courage and skill to climb directly up to the tree and pick fruit.