Any hope in these šŸ¤”

I donā€™t know if these are going to bounce back, but they are mostly stocks that have been hyped up on forums. Iā€™ve found these type of stocks tend to do worse in a downturn.

After making my biggest mistakes many years ago I changed my approach. I now have the majority of my portfolio in big companies that have been around for years and arenā€™t going anywhere soon. My largest positions at the moment are National Grid, Astrazeneca and Legal and General. They arenā€™t going to be multi baggers, but they will weather the storm better than hype stocks, and they pay decent dividends. They are all still in the green despite the market getting a bit choppy.

I do have some more speculative stocks, but their position size is only about a tenth of the size of my largest holdings, most of them are down at the moment, but it doesnā€™t matter that much as the portfolio as a whole is still doing pretty well.

I guess what Iā€™m saying is think about building up a portfolio of long established profitable companies that have historically held up pretty well in previous downturns. Then look at more speculative companies later.

9 Likes

Darktrace up 6% + as I type not sure why but will dent your loss a little

1 Like

Agreed. I prefer a main course of fairly stable ETFs and conservative dividend companies with a side dish of meme stocks. I have held $TSLA, $ARVL and $LCID but chose close all these positions in the green. To date I havenā€™t reopened a position in any of these companies and prefer Ā£ULVR and $PG and similar

3 Likes

Or double down!!! sell the phone and buy some more stock :laughing: one more reason FT should build a web interface.

1 Like

For the future, consider utilising Freetrade Plus as you get the option to include stop-losses. It helps to prevent you ending up in a minus 50% position again :+1:t2:

Sorry but I donā€™t agree - if the rationale for investment still holds firm then hold. A stop loss is no more a rational decision than the initial investment if it isnā€™t backed by a supporting rationale/strategy.

3 Likes

Best bit of hope I see in this list is that you are at the start of your investing journey, and the shares you liked previously are now for sale at much lower prices.

Take a step back, forget what you spent on each one and consider what you know of the company and whether you would invest today.

Modena for example is a solid company that will probably do well in the next few years and the entire biosciences sector has crashed. So if you liked it before you should like it even more now it is on sale.

You could also consider putting some into an index? If you drip feed in Ā£100 a month for a few years you soon wonā€™t notice these losses.

1 Like

If an investment has fallen by over 50% can you really say the rationale holds firm? At that point the decision to hold is most likely an emotional one, No one likes to take a loss.

A stop loss can help you take the emotion out of the decision.

You could get lucky and make it back, but remember if itā€™s fallen 50% you now need it to make a 100% gain just to get back to break even

That wasnā€™t what I was saying - I agree that you should revisit the rationale. I just think a blanket stop loss is a crude method - why 50% and not 30% etc?

If you believe in the long term future of the company then the rationale can hold.

Also, if you continue to dollar average then you donā€™t need a 100% gain to break even (not that breaking even is that relevant, you can only really work with the position you currently have - sometimes thatā€™ll be up, sometimes itā€™ll be down).

Agree though, there is a psychological hurdle to exiting with a loss.

Thatā€™s the funniest reason to validate a web format, well played sir! :clap: :clap:

2 Likes

Like any investment, you should be entering it with a plan.

For me itā€™s about risk management. No matter how much I like a company, if it goes below the support level that I located during my research, then for me itā€™s time to cut my losses.

For each company that will be different, but itā€™s unlikely my stop loss will be higher than a 20% loss.

Good risk management, research and planning helps prevent you from losing money.

Your conviction in a stock may be 99% but you canā€™t equate for unforeseen market conditions (as we are seeing right now in the market). Obviously with certain stocks it may be your conviction is so high that average down to help bring your overall price down, but you need spare capital to do that.

In my opinion, a stop loss is a great tool, but like any tool, you have to use it correctly and not just whack it on for the sheer hell of it.

To use what someone else said, it takes the emotion out of it and helps you stick with your original plan

1 Like

A lot of people in the past weeks will have been learning more about portfolio and risk management.

Yes in 2020 some people got big gains but now some of those gains have been wiped out.

I would strongly suggest developing an overall plan for a portfolio rather than just investing in a selection of stocks.

In other words for a portfolio over Ā£10k decide what % should go into ETFā€™s such as VWRL that track the overall market, what % should go into other funds and what % into individual stocks and then stick to this for at least a 12 month period.

Personally I donā€™t put more than max 5% of my portfolio into a single stock and my portfolio is 50% index funds. May sound boring but in times like the past months Iā€™ve been glad for this approach.

8 Likes

Meh, mine are better

This topic was automatically closed 416 days after the last reply. New replies are no longer allowed.