3 Tips to Curb The Pain of Investing at the Top
Don’t tie yourself to a sinking ship
In my four or so years of investing in the stock market, I’ve lost hundreds of dollars by investing at the top.
Those are small losses in the grand scheme. I’m glad to have made those mistakes while young with little spending money.
It’s so easy to do. When a stock is hot for a while and trading at or near all-time highs, it’s hard to think it’s going down any time soon.
But many stocks tumble when they seem to be at their strongest — and it can be devastating for your portfolio.
How do you ease the hurt? Here are a few tips…
Examine whether the stock is worth holding onto, and make sure your money can’t be spent better elsewhere
A stock performing well for you in the past doesn’t mean that will continue to happen in the future. If a stock has hit its high and is now falling back to earth, examine the chart and make sure it’s not likely to fall 10%-to-15% before finding its footing.
If that does look likely, consider exiting the position and keeping your money at bay or investing in a stock with more near-term upside.
