>>My problem is I no longer have any direction in my portfolio...And most of all, I'm afraid.<<
Hello freeus,
I have been away for a few days and I am just catching up with the thread. You have already received two responses to your post, but I wanted to add a few words also.
I remember some years ago reading a comment on the market that went like this: If you have any weaknesses, the market will find them.
The market has not been easy this year, and for people who react to it emotionally it has been brutal. And if you invest when fearful, you are playing against a stacked deck. Only you can find direction for yourself, but perhaps it will help you if you analyze what has gone wrong this year.
There are two way to lose money:
1. Select the wrong stocks
2. Buy and sell at the wrong time.
The first thing you should do is determine which has been the larger factor. If it is item #1 the next logical question is: what is the potential that the stocks will come back. The answer is likely very different for say Dr. Koop than it might be for Qualcomm or Sandisk. If you have invested in the primary stocks discussed here the chances are very good that time will heal this wound. Staying the course is prudent. Nothing is worse than bailing out at a big loss and then watching a significant recovery. On the other hand, if your losers are junk stocks they may never recover.
But perhaps your problem is in the second category. Buying and selling at the wrong time is a phenomenon whose occurrence is more likely the more one trades. This is one area where practice does not make perfect. I hope you will not think me an ass for quoting myself, but that is exactly what I am about to do. On May 26 I responded to the heartfelt words of someone else's with this:
>>We all have many choices to make in managing our investments - what to buy, when to buy it, how much to diversify and how long to hold. If you really want to learn whether you yourself can beat LTB&H here is a test:
Take your real portfolio this weekend and create a private portfolio for yourself here on SI. Make everything exactly the same. Then go ahead and manage your investments using whatever tools you wish - TA, FA, options, etc. But, do not touch the SI portfolio, just leave it as a pure buy and hold model. Then you can use it as a yard stick. See if you can beat it for a month, a year, five years. Then you will have your answer.<<
Perhaps you should try this exercise. Pull out your brokerage statement from a time when you were most pleased with your portfolio. Perhaps 1/1/00. Then take the holdings on that statement and update the value with today's prices. Then compare what you would have now, if you had done nothing, with what you actually have today. If you have more today than you would have if you had done nothing, consider the taxes and all the time you spend making the changes you made. Was it worth it? If, on the other hand, you have less today than if you had left things alone, then you will know that you are trading too often, wasting valuable time, and impeding your own progress.
And as I have said before, giving advice is so much easier than taking it.
StockHawk |
