I have a history of this. I have a real knack of selling the bottom and buying the top. My trading account has been all cash and CD's for a while now, so no big deal there. However, this morning my 401k reached a 9% decline so I "liquidated," viz. moved my intl and stock portfolio to mostly bonds and money market. 9% is (and has been for years) my pain threshold. I will not stomach any loss greater than 9% at any time. By this morning all of my returns for the last 14 months had been wiped away. So, my principal and company match are intact, but so much for market return. So what happens? the dow rallies 600 points. The bottom drops out of bond yields. FUCK!!! My patience sucks. This reminds me of when I was just starting out, long 2 lots of Fossil and watching it drop like a vault for 3 or 4 minutes (like 2 dollars in a minute). I started hammering the sell button (this was way back in the day of dial-up connections), and the instant my order executed the damn thing bounced back like a superball. After a few minutes I checked my positions and found that I was short 6 lots, since I had been pounding the sell button (one click enabled)... that was about a $1k loss in about 7 minutes... woe is me...
Im sorry, but I couldnt help but chuckle when I read this thread title. The first step to success is admitting your faults so....at least you have that
Is there any way that you could alert me the next time you make a trade? Just kidding. By the way, I have nothing to be cocky about either.
the market was overdue for a rally and capitulation like todsay and yesterday is usually a sign of some type of bottom...But if you arent a trader or a passive one its hard to get a feel.You probably panicked just as millions did today when all the TV programs started screaming crash etc...You cant beat yourself up over it.Your human,you have emotion....Lots of people got their entire net worth wiped so far in 08 so i guess we need to keep perspective.I am watching the screen all day and i made a puny 100 bucks...had i kept my positions woulda,coulda,shoulda been 1000$. Thats the market for ya.
one way to put it is that u have bad timing. another option is that your portfolio is not consistent with your risk preferences and appetite. I would suggest working on your asset mix untill the fluxuations are such that you feel less threatened. I suggest looking at your asset mix only 1 time a year, and just schedule automatic contributions out of every paycheck. the less u look, the less u obsess and worry, the better off you will be.
Now there is NOT clear where the market will go. Nobody can know for sure, not even Warren Buffett. When you are uncertain, stay in cash.
I think I will go long in my co-workers investments, and after it tanks a few percent offer to unwind my position for a small "fee." I have the power...
ya prolly if you are a passive investor just avg in thru work contributions and dont waste your time checking every day...maybe sell or buy more than normal whenever market looks like its about to change trend...
You're no different than 98% of the rest of us. I should sell a newsletter when I put on a trade so my subscribers can do the opposite. I only know one successful trader, and he does just the opposite of what most on this board would recommend. He never takes a small loss and averages down. But in volatile markets, that strategy and being a contrarian work well.