Why We Gnash Our Teeth
Ideally, every time you buy a stock it would go up in value. Ideally. But, as most and even good investors know, this never happens every time. Instead, you end up buying a stock only to sit and watch it fall right away, and then, sometimes when you decide you’ve had enough, you sell it, only to watch it go right back up again. And then still other times, you take a profit, feeling pretty good about yourself, only to watch it continue its ramp up. Aggravating as hell isn’t it?
I’ve been fortunate thus far to not have had to make a decision precisely like the first yet, in other words, I haven’t had a stock fall so much so as to make me think I really had to get out, but I have certainly seen some stocks I’ve sold go up even more after I booked the profits. It’s moments like these when we’re bound to furrow eyebrows.
Revisit old friends
One thing I like to do to combat the angst is to revisit old friends. Every time I do it, I come out feeling pretty good. Why is that? Because, after all the fist clenching following the witnessing of sold stocks’ gains, I get to see something my sometimes one-sided mind makes me forget. I get reminded of all the ones that fell too. Generally speaking, trying to map out all the “what if?” scenarios is incredibly hard because if I want to start asking “what if?”, I’d have to try to figure out what would have happened had I held on to certain stocks, but, one major problem is that if I had, I would not have been able to buy later stocks had I held on to earlier stocks.
However, I can still make a list of the all the stocks I’ve ever bought and pretend that I bought them at the price I sold them. Then when I’m watching ACH soar (and soar), I can hold that next to all the stocks that have fallen, those that I’ve long since stopped paying attention to, and get a clearer picture as to how I’m doing. I can ask, “Am I consistently selling stocks too soon?”
How Am I doing?
It turns out, I’m doing pretty well. Using an equal weighting, had I stuck to it with all the stocks I’ve bought, instead of taking some profits, I’d be about flat. Precisely, I’d be up about 3.5%. And that’s with a 68% climb from ACH included. So the next question is, whether, given the stocks I have now, which I would not have been able to buy had I held on to the old, I end up outpacing the general performance of those old, can I feel good about my general decision making. I think so. Greater time will tell with grater clarity.
So, if you ever start feeling in a funk because you look out at a side view mirror and see some things you think you might wish you hadn’t done, don’t forget to check the other one too.