She decided not to cut losses in stocks despite being advised by her best friend: Where does faith come from?
Right before the pandemic hit, Jen Glantz first learned about the stock market. Her best friend introduced her to investing. Given the substantial returns on this market in previous years, it was quite appealing to Jen. She thought she could make a decent amount, as it always grew over time.
In the past 2 years, although with different returns, most of the stocks she invests in have grown quite well. However, because the market in early 2022 was quite volatile, some of the stocks she was holding were affected and decreased significantly. That’s when Jen received advice that she should sell her holdings as soon as possible because the market was going down.
There are many people talking about this, especially a close friend of hers. Not a financial expert, just a passionate business person who has been playing for a few years, constantly giving such advice makes her quite bewildered. However, even as a new investor, Jen Glantz feels that advice does not fit her strategy for four reasons:
1. There is always a rebound
While it is difficult to predict when the market will crash or recover, it is safe to say that these are two factors that will occur in turn over time. That is, when looking at all of the major US recessions, the stock market has always recovered in the end. And Jen Glantz believes that in the long run, stocks are always on the upside.
If you sell your stock at a low, you will always be at a loss. Stop loss is not wrong, but if you don’t have a strategy to do with your money right after, you will lose an unnecessary amount of money, especially you can stop loss at the bottom of the market. On the other hand, if you hold it for about 5 years, Jen believes that a good stock will always pay off.
2. Believe in “buy low, sell high”
Jen’s first thought, after receiving advice from her friend, was to buy more shares of good companies with high discounts. So that’s exactly what she did. Jen Glantz has invested more money in 3 companies in which she already owns stock.
The “buy low, sell high” investment strategy is what she believes in. While it’s difficult to know when the market is at a high or a low, Jen doesn’t believe in selling off a stock that’s already low with companies that are still doing well and the stock is likely to rise. return.
3. Don’t make decisions based on fear
When it comes to finances, there are often a lot of emotions that can influence the way we manage our money and the final decisions we make.
She admits that she has previously approached finance with a fear-based attitude with an overly conventional mindset. Jen Glantz has spent years rebalancing her mindset towards money. Now, she is completely focused on being practical and strategic.
The impulse to sell in a panic turns into a fearful thought she tries to avoid. That’s why, whenever she makes financial decisions, she always makes sure she’s spent enough time researching and understanding the essence of the matter.
Selling stocks now because I fear they won’t recover doesn’t seem to make any sense for the long term.
4. Always remember your long-term vision
Accounting for more than 50% of the total shares purchased, she plans to hold for the next 10 years because she believes in the company’s growth potential and market share. While the market value of each stock may decline now, it’s important for Jen to remember why she bought some of these stocks herself.
Plus, with a long-term view, according to Goldman Sachs, the average stock market return over 10 years is 9.2%. Therefore, there is no reason to sell some of these shares right now.
Law and Readers
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
