10
Panic Selling
by Don Cassidy and Donald L. Cassidy from 30 Strategies for High-Profit Investment Success
Your investment lifetime will include a number of market panics. How you act during those extraordinary periods will exert a major influence on your eventual total wealth. Although brief, price panics have lasting financial effect: Ego usually prevents people from reversing themselves rapidly. Once you sell in a panic, it is very unlikely you'll think clearly enough, very shortly thereafter, to buy back in near the lows. Instead, you'll be on the sidelines a fairly long while, recovering your courage to be able to buy again. Your emotional healing process will be enhanced by a return of rising prices, which gradually will win you over. Most who sell near a bottom fail to reenter until well toward the next top.
Selling during a panic costs you money in two ways:
1. What you sell will be sold low, possibly below its cost and certainly at a loss compared with its earlier prices.
2. You'll be in cash during much of the market's ensuing rise, thus missing significant gains during that bull phase.
The first kind of loss, from selling into a panic, is an actual dollar loss visible on your tax return; the second, every bit as real and important, is an opportunity loss—a gain not taken.
0 التعليقات:
إرسال تعليق