Major losses across portfolio

đź“Š Investing
1

Hello,

I made some very poor investment decisions in early 2021 and bought a load of hyped EV and MedTech stocks and some SPACs that initially performed well but then tanked and I’ve watched my investment continue to slide.

I don’t set any stop losses and have just watched my investment disintegrate, all while hoping for a recovery. From this point I know the portfolio will have to significantly outperform to recover and the chances of that are near zero due to these being some hughly speculative plays like Fisker, Nio, Hyllion, Workhorse and QuantumScape.

I know it’s my mistake and I am trying to learn from it and I have thought about cutting my losses a number of times but am struggling with this psychologically. When I think about doing it, I hesitate to only find that the portfolio has lost further value.

What would people do in my position? The money I will lose is significant but I believe I can make it up through my income and other investments. Should I take out what I can before it all disappears?

Thanks in advance for any feedback / advice. I know it is ultimately my decision but any guidance would be much appreciated

2

I’d cut your losses and sell up. Start afresh, I’ve been there once with spreadbets and not having a clear strategy.

Much better to start again on less speculative investments, the pain is soon forgotten once the positions are closed.

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3

It is tough and it is very very easy to hold onto a losing investment rather than accept the loss.

I would take each share on an individual basis and evaluate whether it is now a decent investment. I would be fairly tough on that evaluation but if something has made its loses but could deliver then it is better to go back to basics and look at it putting aside the loss you’ve suffered so far. Pharma stock in particular can suddenly rocket.

You also should probably consider you’re timescales. If you have long timescales then that may influence your re-evaluation of the stock.

You also don’t need to sell 100%. If you consider that a stock still has potential you could partial liquidate your investment but leave a portion.

edit: I am in the process of changing my own trading and investment strategy. I have recognised that I have previously hated crystallising a loss particularly when I believe in a company long term. The temptation is always to hold telling yourself that it will reverse and go up. I am being more rigorous in terms of investing in stock that I believe has long term potential or simply view it as a short term trade where I will exit if in doubt. Even with long term investments I am now happy to sell if I think it is hitting resistance or weakness on the basis that I will view buying lower as a form of profit.

Don’t be too tough on yourself. Learn and re-assess your own strategy - strengths and weakness. Learn from it and move on.

Also maybe evaluate need for diversification and perhaps have a % in investment trusts/funds…

Be kind to yourself. View this as a learning opportunity.

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4

Have a core portfolio where say 95% plus is in an all world ETF such as HMWO, VWRP or even FWRG, but buy one in your own currency. That way you can still choose your own investments, and if they do well, then great, but if you have the same luck with your investments as above, then you limit the downside.

If you invest in GBP, then checkout BeerMoneyUK on reddit - it has a lot of good ideas, and perhaps you work to recover what you have lost through past investment decisions you made?

5

I feel for you. We’ve all been there, the reason why you are not selling is because you cannot admit you are wrong.

Accept you lost that money. Get out and plan for another day.

Do not think you cn get this money back you wont. Dont revenge trade, start afresh…

I teach others how to trade so if you want to know further you can contact me.

6

Can’t speak for the other stocks, and i dont own any of them, but i think Nio could still turn things around long term (by that i mean a price of $10 at least). They have some big backers including the full support of the Chinese government. Depending on when you bought in and how much down you are, i would think about the opportunity cost of selling, especially at these prices. If you kept Nio for the next 5 to 10 years do you think you would get back more than if you sold and invested that money else ware in the same time period?

7

You learned a hard lesson, but the money is probably not coming back.

Read some books like A random walk down wallstreet and look into the Boglehead investing philosophy.

In short, invest in a globally diversified fund like Vanguard FTSE All-World and ride its ups and downs. This is the most sensible way to invest and maximizes your chances of success.

If you still want single stocks, allocate no more than 10% to them (combined).