Losses on investments in shares

NannaH

Out of interest,  what’s had such a big loss?
My L&G Global tech fund returned 33% this year and 41% last year.   

Retireby40

jimjames said:

sevenhills said:

[Deleted User] said:

Hi,

any share that drops in value could be deemed a bad choice, in the short term, you only lose when you sell, though sometimes better to just sell, take the hit, and hope to pick a good choice.

You don't say how long you were invested, are you a 'day trader' type fella?

I have held shares for around 10 years that dropped and then finally recovered and then I went on to sell at profit. National Express was one such share. They are now worth the same as what they were worth 25 years ago.

So if you'd sold out you'd have had growth from elsewhere in that 25 year period.

Or maybe they would have invested the money in another thing that didn't do as well and continued to lose money.

Or maybe he would have heard about bitcoin and bought it. Or liked the look of a Tesla he had seen on holidays and thought. Worth a punt.

Until we know the company we won't know if the OP is panicking because he has seen red for the last 6-12 months or he genuine could be right if the company has changed this year.

DiamondLil

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thrugelmir

Retireby40 said:

jimjames said:

sevenhills said:

[Deleted User] said:

Hi,

any share that drops in value could be deemed a bad choice, in the short term, you only lose when you sell, though sometimes better to just sell, take the hit, and hope to pick a good choice.

You don't say how long you were invested, are you a 'day trader' type fella?

I have held shares for around 10 years that dropped and then finally recovered and then I went on to sell at profit. National Express was one such share. They are now worth the same as what they were worth 25 years ago.

So if you'd sold out you'd have had growth from elsewhere in that 25 year period.

 Or liked the look of a Tesla he had seen on holidays and thought. Worth a punt.

NannaH said:

Out of interest,  what’s had such a big loss?
My L&G Global tech fund returned 33% this year and 41% last year.   

After the Dot Com boom you'd have been fortunate to walk away with 10% of your starting capital left. If you had invested in a tech orientated fund.  As many did at the time. 

Retireby40

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

Thrugelmir

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Retireby40

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Thrugelmir

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Retireby40

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

bostonerimus

Retireby40 said:

Thrugelmir said:

Retireby40 said:

Thrugelmir said:

Retireby40 said:

DiamondLil said:

The op's first sentence reads "Over the past 12 months I've started investing in stocks using trading 212."

Not sure why posters arguing the point with @Retireby40 who states nothing more than that stated everywhere on this forum - investing is for the long term and not recommended for periods any shorter than five years, preferably ten years.

He/she is suggesting exactly the mantra repeated on here every day that 12 months is not long enough to make a judgement.

Thanks. That's exactly my point. There's going to be years where you are down 20%. Other years up 20%. It seems to me that the OP has probably started investing and feels like he should cut his losses.

When in reality he should probably hold and see what happens down the line.

If you are holding a stock that falls 20% then recovers 20%. You'll still be 4% down. To recover past losses the stock needs to rise 25%. That's basic mathematics. 

Yes. If you sell. My point was 1 year you can be up, one year you can be down. 

Hence why everyone says hold onto stock for the long term. 5+ years to ride any bumps along the road.

Holding collective investments for the long term yes. Individual shares I'd say generally not. Company fortunes wax and wane rapidly. The markets will have the news well before retail investors ever do. Providing no opportunity to react. Actively trading shares requires one to be both watchful and nimble. Also not greedy. 

Why are they any different. Imagine someone who had bought Amazon shares. Or Apple shares. Or Tesla shares years ago. You'd have been telling them at the first loss sell up quick and take the hit.

Today they would have been coming here looking your blood.

The differences are volatility and risk.

The OP is in the classic conundrum of when to sell and when to stick or buy. If the OP has confidence in the stocks they bought the drop in price could be a buying opportunity and if they don't have confidence then why buy the share in the first place. If nothing has changed except the price then buy more.

The fact is that most retail investors cannot, and should not, research individual stocks in the depth required to make any really sensible decision. Even then they run the risk of poor management decisions, fraud, an unlucky singular event etc etc. And they most often buy on what they last read in the newspaper, hear on TV or down the pub, or on a tip from a friend or purely on a whim. So individual stocks should be avoided and the regular investor should build a simple diversified portfolio using multi-asset funds and/or some sector investment funds. They should also have a simple rebalancing strategy that takes all the emotion out of buying and selling. Do that for 30 years and success is highly probable.