How prideful are humans?
There are times when even the most agreeable person can be unbelievably stubborn – often times, even if it goes against their best interests.
It just seems to be human nature.
However, when it comes to the investment world – this is NOT something we should ascribe to.
In fact, pride in the investment world could cost you MORE than just a few bucks…
It could cost you your FUTURE!
There’s one common mistake even the savviest investor can make from time to time – a mistake that we’ve all been guilty of making…
But unlike other investment “gurus” – I’m actually going to explain how to overcome it.
You’re probably wondering what that mistake is right about now…
Maybe even going through your mental list of boneheaded mistakes that you’ve made over your investment career – from getting in too high or selling before the peak – but these two PALE in comparison to the mistake I’m talking about.
I’ve already touched on it in the beginning of this article…
It all comes down to pride.
Pride will make us do some DUMB things in the real world, won’t it?
I’m not too proud to admit that in my younger days – I made some doozies – but we’re not here to talk about my past or even my present…
We’re here to talk about your future.
Before we move forward, see if you can answer this question: What is the cardinal sin of investing?
Some people may be saying it has to do with timing while others may be saying it has something to do with the value lost or gained from a stock…
But they’d both be wrong.
The cardinal sin is committed when you break a cardinal rule – and in the investing world there is NO rule more sacred than NOT getting emotionally attached to a stock.
Emotions in life will make your judgment cloudy, at best…
In the investment world – that same cloudiness could cost you more than it ever should have.
For example, take the investor who is down BIG on a stock. The stock was doing great – but it has since dropped so significantly (maybe even to the tune of 70% or more!) – that the losses are just short of catastrophic.
If you’ve been investing for any length of time and can’t say you’ve been in that EXACT position at least once before – then you’re either the luckiest man or woman on earth…
Or you’re lucky you’re not to be made of wood and named Pinocchio, because you’d have a hard time standing upright.
We’ve all been there…
But it’s how we react when we’re in that situation that can turn a potentially devastating loss into a HUGE win.
What we can’t do is let PRIDE get in the way when one of our positions takes a loss and doesn’t rebound …
If you own a stock that hasn’t rebounded and is down more than 8%-10% (you didn’t use a stop loss)– the odds of you getting your money back get slimmer as the losses grow larger.
It’s in these instances where you just have to let that pride go – that pride of holding on to the loser untill you get your investment back (or at least SOME of it) ….
You have to let that go – because if you don’t – you’re going to miss OTHER opportunities that could bring you out of the hole rather than stick with the one that’s keeping you in it.
If your stock is trending down and you see another trending up…
I’ve seen investors hold on to losing position for YEARS, before the compnay finally goes bankrupt.
Why would you stay in the losing position?
Better to get out and move on to something that’s going to make you money than stay in something that is just going to end up costing you more in the long run.
Let it go…
It may be the chorus to your daughter’s favorite song from an animated movie – but it’s also the attitude you need to take when dealing with stocks.
Of course – we’re not saying you should get out if your stock has a bad day. Even the BEST stocks have bad days, or weeks even….
But if your stock drops dramatically, and those bad weeks turn into bad months – odds are – you’ll be in for a bad year (or more).
Don’t let your pride keep you in a stock. Let it go…
And you may just find out that while letting go is one of the hardest things to do – it’s often the BEST thing you can do for your sanity.
In fact, if you cannot take a loss now and then, investing in the stock market is not for you.
Of course, if you’re ever looking for guidance – GorillaTrades is here to help if you ever need it.
We can help give you the ammo you need before you pull the trigger – and we’ll continue to do our absolute best to bring QUALITY profit opportunities to your attention as they come up.
However, if you’re quite content being that proverbial lone wolf – we understand – just realize there’s always a pack waiting for you.
“There are two kinds of pride, both good and bad. ‘Good pride’ represents our dignity and self-respect. ‘Bad pride’ is the deadly sin of superiority that reeks of conceit and arrogance.” – John C. Maxwell