Don’t Get Married to Your Favorite Stock

Don’t Get  Married to Your Favorite Stock

 

The biggest talk of the town this week is the  the wedding engagement of one of the most popular singers in this generation Justin Bieber to an American model Hailey Baldwin. This broke the fans of Selena Gomez who are still hoping that they will end-up together.

 

The #Jelena tandem would no longer become a reality. That’s too sad to think. However, people are happy that a young actor has now stepped-up for the next level of his life. I’m not a fan, but engagements and weddings are very interesting and fun to watch. I’m sure this would capture worldwide attention for fans who want to be part of this most-awaited wedding. 

 

On the other hand, in the stock market, some investors would think keeping a favorite stock forever is a good idea. Yeah, there’s no forever! (#Hugot) I really admire those who think this way and who think long-term but there are things to consider before deciding to do so.  

 

As for me, there should be no wedding day and holding them forever is not wise. Whether you like it or not, you have to cash them-out. There will be a time that you have to part ways and let it go. 

 

 

You have to know when to DIVORCE them. 

 

 

Begin with the end in mind.

 

Before buying a stock, you have to know until when you can keep it and when to sell them. Even for long-term investors, you have to set a goal for yourself whether it’s a 5 year time frame or  it can up to 10 years or more. It’s your discretion but you have to set a timeline for yourself and stick to it.

 

Another thing to do as well, is to set a target price so that you would know when to take a good profit. The problem with several investors today is that they tend to change their time frames multiple times, either someone told them to do it or they just read something not credible in Facebook groups.

 

Again, the discipline in investing is the one that counts the most in your journey. It is okay to change your goals as long as it is part of your investing plan. 

 

 

Some blue-chip stocks won’t remain a blue-chip.

 

 

Do not get sold-out to an idea that because it is a blue chip stock, you can buy and forget them and expect a tenth-fold return with it, just because it is a stock in the index. Even blue-chip stocks are not safe. They are heavily-monitored by the Philippine Stock Exchange board. 

 

Under-performing index stocks are replaced with younger and smaller cap-stocks with higher potential growth. This is sad but true.

 

When you see your stock that is not performing well, you need to check if it is just lagging for some reasons or there’s really a problem with the company or it has changed its business direction. You have the option to replace them it is no longer good to keep it. 

 

 

Letting them go doesn’t mean you can’t have them anymore.

 

Good thing about the stock market is that it runs in a cycle: Uptrend, Downtrend, Sideways. The opportunity of buying the stock again has no limit. You might even have a chance to buy them at a lower price than the previous buying price you had them.

 

Once the stock recovers and display good earnings, you can start accumulating them. I had these stocks before that I just let go to prevent large losses but I eventually bought them back when I saw that the trend was going-up supported with good earnings and promising future growth. 

 

 

 

To Get Married or not? Think again. 

 

 

 

Do you want to read more? Click this link: HOW TO CUT YOUR LOSSES AND WHY IT IS IMPORTANT

 

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