Thought this as a good read for EUo bagholders, specially Raptor could do well by taking some lessons...
How To Cope Financially With Painful Stock Losses
Stocks can be exciting, but with the opportunity to gain profit and lose funds, finding the balance is important. Not all stock traders are successful, and many will experience painful stock losses. While some may turn to a payday loan in order to obtain aid in the event of a financial emergency if they have experienced a painful stock loss, there are a number of coping mechanisms which can be put in place in order to ensure that a trader can cope financially. Here, we’re taking a look at just a few.
Have A Separate Budget
A simple way to ensuring that you are coping financially after a painful stock loss is to ensure that you have a separate budget set aside for this exact scenario. Before you enter the stock market, you should always ensure that you have money set aside in a separate budget to ensure that you are not left financially unable to care for yourself or your family. Even some of the most seasoned and successful stock traders get it wrong sometimes, so you should always ensure that you do not put more than you can physically afford behind a particular stock.
Attempt To Recoup Losses Over Time
A meaningful way to cope in the event of a painful stock loss is to accept the fate that has occurred, and to attempt to then learn from one’s errors and recoup any losses over a period of time. It can be tempting to throw money at another stock that you think may be successful in order to quickly gain back your losses, but more often than not, this strategy can set you up for failure. If you are trusting the wrong people with your stock predictions, have taken an excessive risk which ultimately didn’t pay off, or if you were simply unlucky, there are a number of different elements which you can learn from in order to ensure that you are more likely to do better in the future.
Diversify Your Portfolio
If you have experienced a significant stock loss in a particular market, it may be time to consider diversifying your portfolio, if you haven’t already. Quite often, one particular market can crash quite dramatically and if you have invested in a number of stocks within this market, you could find that it has a significant impact across all of your stocks. The state of the cryptocurrency market in early 2018 is a key example of an entire market crash. Look to alternative sectors and begin to diversify your portfolio in order to better weigh up the opportunities. This way, any major crashes will not impact your entire portfolio.
Put Your Loss Into Perspective
After a very painful, major stock loss, you may feel disheartened, and in some cases, you may find yourself in a financial crisis. It is important to ensure that you put your loss into some sort of perspective, in order to restore balance to your life as a whole which will ultimately help you to take steps into turning your trading life around. Losses on stocks can seem disastrous in the moment but taking a step back will allow you to have a clear understanding of just how impactful the loss is, and how you can effectively recover. Some people may need to seek some form of counselling in order to reach this stage, but no matter how you do it, it is an important coping mechanism.