Interesting subject because learning how to deal with your stock portfolio losing value can be a very important experience and tool for success. I’ve read plenty of money management books, but when it comes to losses it seems the only thing you can do is take a step back, observe, and react to the current situation. What stocks do you own? Are they in industries that are losing gobbs of money and going bankrupt (currently financials and auto). Consider using the warren buffett method or buy staple stocks such as an industry like utilities such as General Electric (GE). At least until we get better energy we will always need electric companies, gas companies, oil, natural gas, and soon hydrogen power such as Ballard Power (BLDP) or HOKU solar (HOKU).
As for emotional pain I say buy a big delicious pizza and treat yourself just because you are investing. Now don’t get fat and eat notoriously with the more negative gains you receive, but know just like a good treat bad things do finally come to an end and you will reap rewards by being patient. I suggest even punching a boxing bag because #1 all the energy you’ll be letting out will make you dizzy and forget about your financial problems #2 it helps you feel better and stay in fit and #3 it will make the meal you can still afford more delicious.
Financial strategies you can think of if you want to switch some of your money during a down market at least I would do woudl be tax liens, buying a rental properties, and shorting stocks or buying up put options on your stocks that are falling then sell off the options once the market changes its mood.
Learning how to deal with your emotions, appetite, and financial strategies should make you feel all around more confident about yourself and your future. Positive thoughts. Yeah…! At least it does for me losing tons of money on a portfolio or option position I need to immediately rethink my strategy. I’ve had to do this numerous times on business ventures I got into and even relationships.
October 17, 2008 | Categories: trading stock options | Tags: ballard power, BDLP, buying rental properties, eat pizza when you feel down, emotional losses, emotional pain, financial strategies when losing money in a bad economy, GE, general electric, hardship, HOKU, Hoku Scientific, how to deal with your stock portfolio losing value, october 2008 crash, put options, relationships, shorting the markets, staple companies, stocks, suggestions, transferring your money into tax liens, what to do when the market crashes | Leave a comment