“Help! I Lost Money in Stock Market Trades! What Now?”
2018 was the worst year for stock market investors for over ten years.
Fortunately, the market looks like it’s bouncing back. However, you may still find yourself struggling to deal with the losses caused by this recent dip.
While it makes sense that you’d feel this way, it’s critical you learn out how to brush off these losses so you can get back in the game.
Below you’ll find some tips on you how can recover from a stock market loss. If you’ve lost money in stock market trades, these tips will help you get the confidence you need to rise out of this rut.
Figure out Why You Made Poor Decisions
Before you do anything else, you first need to consider why you made a losing trade. The best way to do this is by reviewing your decision-making process so you can identify which assumption led to a stock market loss.
Let’s go through a hypothetical example to figure out how you could do this.
Suppose you thought the stock price of a company would rise after it issued its earnings report.
You may have assumed this because the company recently expanded overseas. But, in spite of this, the company may have missed its profit targets, thereby producing a below average earnings report. This event may have led to a fall in the stock price, causing you to lose money.
By dissecting this decision, you now know it’s a bad idea to assume that overseas expansion will result in a positive earnings report. You can then use this information to avoid making the same kind of assumption in the future.
If you go through this process every time you make a losing trade, you’ll end up with a list of principles you can apply to future trades. By sticking to these rules, you can improve your odds of making a profit when investing in the stock market.
Develop a Better Process Using a Stock Stimulator
A stock market simulator is essentially a tool that mimics the actual stock market, except you make trades using ‘virtual currency.’
You can use this tool to reinvent your trading strategy, thereby allowing you to come up with a better way of finding opportunities.
To do this, you first need to define your rules for picking a stock.
Using the simulator, you then need to put these rules to the test and review whether they led to you make a loss or a profit. If you do this enough times, you should end up with an investing process that’ll allow you to make more winning trades than losing ones.
Spend Time with Other Investors
You may do everything in your power to make a winning trade, but you may still find yourself coming up short. If that’s the case, you should think about spending time with other traders.
In doing so, you’ll be able to learn from them and figure out how they profit from the stock market. You can then use this knowledge to improve your own trading strategy.
If you want to spend time around other investors, you have two options.
One is to spend money on an ‘investor mastermind group.’
To join a mastermind, you need to pay a membership fee. These groups are worth attending because the joining fee means members are serious about investing. This often means that the quality of information shared by those in the group is going to be high.
That said, some groups may have specific income requirements, and if you don’t meet these requirements, you may not be able to join the group. This’ll be the case even if you can afford the membership fee.
It’s worth noting that an investor mastermind group doesn’t have to be an ‘in-person’ thing. That’s because some masterminds are purely online, and the members may gather on a purpose-built forum or Facebook Group.
If you can’t afford to join a mastermind, you can attend a free ‘meetup’ which caters to investors, and you can find such events by using the meetup website.
Such events might not attract the same level of investors you’d find in a paid mastermind. But they still give you the chance to learn from people that are more successful than you.
Should You Consider Another Form of Investing?
You may do all the above and still struggle to make a profit from the stock market. If that happens, it’s worth considering whether the stock market is the right investment vehicle for you.
There’s no shame in choosing another investment vehicle as different solutions work for different people. The real shame would be to stick with stock market investing even though you hate it and it’s causing you to lose money.
For instance, you may find that real estate investing is a better way to invest your money.
You might find the process of finding real estate deals much more enjoyable than finding stock market opportunities. Because you find the process more enjoyable, you may find it easier to make a profit.
Of course, it’s important to note that there are forms of investing outside of real estate. You could use ‘funding’ websites to help you find small businesses that are looking for money. You could even think about investing in assets such as bonds.
Have You Lost Money in Stock Market Trades?
If you’ve lost money in stock market trades, you may have doubts about your ability to make it as an investor. But before you throw in the towel, it’s vital you take a moment to figure out why things didn’t go as planned.
This might mean you conduct a post-mortem on your losing trades so you can avoid making the same mistakes in the future. It might also mean you need to join a mastermind so you can learn from those with more experience.
Investing isn’t easy, and it takes a lot of work to turn a profit. But if you can remain positive, even during the tough times, you should find yourself with so many wins that you can handle a few losses here and there.
Struggling to picks stocks? Read this post to learn about some stocks that might take off in 2019.
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