My stock are red, should I sell?
We all love when we are in a positive return on investment. It gives us more leverage in our future endeavours to grow our wealth, and we feel more confident. But then, if it turns red, what should I do ? Should I sell ?
Here are 5 points to help you during red days.
Average down
Do you think selling and then exiting with a loss is the best solution ? No. Averaging down for reducing your Stock Price average ? Yes ! Averaging down will enable you to lower your average price and when the stok price will be in an uptrend, your break even point will be easier to reach.
In fact, during a downtrend, it is the best moment to invest. This is why you always have to have spare cash in any situation. One downtrend ? Buy and keep cash. Another downtrend ? Keep buying and spare cash. There will be some point where you will see a consolidation of the stock price and you will know it will be about to bounce back.
Buy when it’s red and sell when it is green. !
Trust in the company's fundamentals
Fundamentals are a company’s ID. It provides financial data. If you have invested in a company with great fundamentals, you have to feel confident about the future.
The stock price might goes up or down but the fundamentals are like the anchor for the boat. If the boat is deriving , the anchor will stop the movement and bring back the boat where it is supposed to be.
Long term investment
Having a 100% return over a week is practically impossible. So don’t expect to become a millionaire within next week.
Ups and Downs are part of the stock market. When you invest, you should wait until 6 months before deciding if you want to sell or not.
The company is still working
Sometimes, the stock market is based more on speculation than real valuation. It means that even if the stock price will go up and down, the company you invested in is still working on how to grow. But once again, the fundamentals stay the same, and so should be your sentiment about a company.
You can see sometimes investors calling for News Releases when the Stock Price is down. The companies will give News Releases if they have good things to share. If not, they will focus on work.
Turn off your notifications
It is very tempting to watch every day, every hour, every minute your portfolio growing. It can also be very frustrating to see your portfolio losing value. For this reason, you can turn off your phone and check once in a while your portfolio. I t will enable you to detach from this day-to-day stress and you will stop losing your hairs.
