Iām sure like many others the last few days on the LSE have been really poor. Iāve gone from being up on my Ā£900 investment by about Ā£20 to now only about Ā£5. This is over a 6 week period. Iām just really concerned Iām going to start seeing a loss in what Iāve invested. The thought has crossed my mind to sell ? Can anyone give me some advice please. Thank you.
1 Like
Time in the market is better than timing the market.
10 Likes
The stock market is always volatile so there will be times when it falls.
Hereās some info that I collected about how to handle the volatility & whatās happened in the past - Current US tech bloodbath - #23 by Freetrade_Team1.
We also wrote a blog post about this.
I hope that helps!
4 Likes
Relax. Investments in the stock market are for the long term. If you donāt need this money for a year or two at least (hopefully lonnger), and you are confident about the companies you invested in, it really doesnāt matter if it is down by 1%, 5%, or 20%, and it will go back up again.
3 Likes
Short term flucations are typically nothing to be worried about, but it does depend on what you have invested in.
If it was 1 company and the drop has been because the company is on its way to bankruptcy, you should probably sell.
If youāve invested in a broad index tracking ETF like VWRL, then the drop means you should probably try to buy more, because you can assume it will rise again in the future and youāll make even more money.
3 Likes
Iām in the red overall in my Freetrade account. I bought a wide range of stock last month when android went live. At first I was in the green but itās dropped back over the last few days. some things are still showing a decent profit, others are showing a loss.
Iām not worried though. I will just hold and collect dividends. Iām confident I will be well in profit later this year.
Have a bit off a look into Stock market Seasonality. it is traditionally a bit slow from May onwards and picks up towards the end of the year (although this canāt be guaranteed)
5 Likes
Itās interesting the different attitudes people have to this. My personal rule is never sell unless you have made money.
The reason being I pick solid stocks that are very unlikely to go bankrupt, but if they did I would just have to write the money off. I do this to avoid panic selling on bad news or a market crash. When I first started I used to sell on bad news, fearful of dilution or bankruptcy, and invariably stocks would go up again (though sometimes it takes years). If youāre in it for the long haul and like the company I canāt see a reason to sell if it goes down - on the contrary often a good time to buy more.
2 Likes
Yes it does thank you. I think I just need to ride the storm out for now instead of panicking. Like a lot have advised most of my investment is in ETFās with only a few dabs in individual stocks like Glencore (I know bad move) and ITV.
2 Likes
I donāt think itās prudent to be blind about these things. Yes, you shouldnāt react to the slightest bit of negative market news. But you have to look in to the specifics of the company in question. If they have actually announced they are going in to administration, you sell! Thereās no point making a 100% loss when you can make a lesser loss instead.
Generally speaking, if youāre picking stocks on the basis of some rationale (and not just doing so effectively randomly), then you should be rebalancing and checking if your portfolio still matches your rationale. Even a determined ābuy and holdā investor should not hold on to terrible companies. They should sell to buy something else if there is now a better company according to their criteria.
1 Like
@anon287192 Iām trying to look at this from the perspective of a beginner - the biggest mistake people make is too much trading, trying to react to news (which is already old news as far as the market is concerned). Clearly there will be some circumstances where itās sensible to sell to avoid a complete loss. But just as an example in 10 years of investing Iāve never had to sell because a company was going to go into administration, and I suspect by the time I realised that was the position, Iād have lost 80-90% of the investment anyway. It just hasnāt happened, though I accept it could happen. I donāt think you should describe strategies which are not yours as blind, theyāre just different.
The advice to hold is not for the circumstance you outline, but for the hundreds of other similar circumstances that would make a beginner sell (gone down 10% must sell! bad news about company being sued, must sell! etc). Itās far more common and likely to sell for those reasons and justify it to yourself with the reasoning that they might go to 0.
Everyone has a different strategy, with more or less activity required. Some people do very well with a simple buy and hold strategy, and Iām inclined to think for a beginner it is better than attempting to rebalance frequently. Screening stocks and picking on that basis with relatively active trading is your strategy, and Iām sure it works well, but Iām not sure itās something Iād recommend to a beginner starting out. Companies do not usually become terrible overnight, itās often a long process, so thereās plenty of time to sell if you think a company is not keeping up or headed in the wrong direction.
7 Likes
Donāt worry about it @Pazza. If this was September and today was January it would be a value of around Ā£750! Markets can be very volatile - but they always have recovered and usually within months. If you find it depressing or worrying itās best not to look. The news always reports the dips and crashes, but never reports the long term gains. Remember we are all in the same boat. If yours go down, mine will go down too. Perhaps mine will go down more. None of us have lost anything.
Have a read of Bob - the worldās worst investor.
4 Likes
Weāre actually largely in agreement, and this is not my strategy. Ideally it wouldnāt be relevant for a beginner investor, but there are beginner investors who attempt to pick (screen) stocks. I was only pointing out that that logic dictates if youāre following a stock screening strategy, even if itās with the goal to buy and hold, you still follow your own strategy every year and keep screening. Importantly, you screen your own stocks in addition to new ones.
A Warran Buffet style investor who avoids selling at all costs still sells when appropriate.
1 Like
6 week period?
Thatās noise.
Shares are extremely likely to beat other investments but only over timescales measured in years not weeks.
Very few short term traders make money.
4 Likes
Your a great lot I appreciate all your comments and of course reassurance. Thank you 
2 Likes
Thereās a fun little game here to try to illustrate this time-in-the-market point. Obviously oversimplified, but you get the idea -
4 Likes
Relax. Just look and think long term. I was the same when I first started on here. Now my investments can vary by about Ā£80 a day. I just let it do itās thing and keep on investing every month 
Ride the wave, practice pound cost averaging and youāll be set for a good retirement. If youāre concerned on your shares fluctuating short term maybe you are investing for the wrong reason or are scared to lose that money. If this is money you canāt afford to risk try looking for a high interest savings account
2 Likes
I would advise to read some of the Warrent Buffet books or Ben Graham - The intelligent Investor.
Typically stocks are going in waves. goes up/ retraces /goes up and so on. I try before buying to project this company for 10 years. So typically holding stock for 10 years you would eliminate all the noise in the market. Makes you sleep better. Same happens with your pension fund or saving account in the bank its just you dont see it behind the curtains. Life got many ups and downs.
3 Likes
Depends how risk averse you are - if youāre concerned about making any kind of loss Iād just put the cash in the bank.
Worry not. As said earlier it is time in the market, rather than ātimingā. Few can master the latter.
This is where pound cost averaging is your friend. Coupled with Freetradeās compelling model of zero/low cost transaction fees, just drip feed into the market. On ādownā days you get more shares for your money. In fact really bad days are when I prefer to buy. I would only buy in a rally if FOMO was winning in my mind. Buy into quality companies and periodic drip feed invest throughout the cycles and try to ignore the gyrations of the market. Donāt invest money you envisage needing in the very short term.
2 Likes
Iām down 3.65% but Iām not worried, Iām kind of ok with it because as our mate Buffet says (we do like to quote him, or in my case paraphrase) āyou only want the stock price to go up if you plan on selling soon, otherwise you want it to go down (within reason) whilst you accumulateā.
3 Likes