InvestingForOne has a specific mission – advise single women (men also welcome) on how to invest money wisely for income and safety.
Yesterday’s post about YAWNs brought forth an excellent comment about Mr. Money Mustache, a blog we looked into for our blog roll. However, Mr. M is a young person relative to IFO’s target audience. He does not appear to be a YAWN (Young And Wealthy but Normal) – essentially rich kids who give lots of money to charity. He just lives frugally, and blogs about it.
However, today we want to talk about investing again – it IS in our name, after all!
In IFO’s lexicon, trading is buying and selling shares of companies often – sometimes daily, hoping to make money on quick upticks. We’re following a long, interesting thread on Stock Gumshoe. Commenters seem to be primarily traders in biotech penny stocks, though some are holding for longer periods.
Here’s one of the comments that got our attention (edited to maintain anonymity):
I thought [company which shall remain nameless] had great promise in 2009 Bird flu, Ebola, etc. Bought in @ $3 or so, rode rocket up & right back down, sideways till 2013 resumed slide down, 1st turn I sold. Slight loss for 4 years. Today looks like resume of old habits,
What this brings up is the perennial problem: when should you sell a stock? We all have a tendency to fall in love with our companies. When the share price goes down a bit, many of us think, “Maybe I should buy on this dip?”
But sell a loser??? Never!!! We picked it for good and sufficient reasons. If we sell, that could mean our reasons weren’t so good or sufficient after all.
This is where you need to do a lot of personal psychoanalysis. Figure out what your psychological profile is – are you too impulsive, too cautious? Be as honest with yourself as you can, because your portfolio depends on it.