Learn Financial Pain Management

Have you ever felt disgusted seeing your portfolio ? Have you again felt totally depressed while seeing it and have you wondered how come you landed yourself into such a pathetic portfolio where all scrips or most of them are showing negative returns ? Have you ignored markets for a few weeks / months on the pretext of (a) not being well, (b) lot of office work, (c) family pressures, etc. when your portfolio has started showing negative returns ? You are not alone.

Firstly, just think about it. You would have entered the scrip at a high point, when the scrip would have become a momentum play based on tips, advise or your own study or intution. A scrip which is a momentum play can simply give away agains before even you can decide whether it is a pullback from recent high or correction. Again it deceives and goes up again and you think it is back on track. Before you realise, it is down again and you simply get frustrated with the moment in that scrip. You want to look at that scrip after some time when the picture is clear and when it is clear, you realise even booking the loss may not make sense and a short term investment becomes a long term investment and hope.

Solution ? Face the truth. Don't look away from your portfolio. See what is the potential of those scrips now and whether you need to switch to more promising scrips and sectors which are market favourites when you are examining your portfolio. (Remember the rule : Winners win consistently ...).

You took a bet which you may have thought was a calculated one and in which you would earn some money. You may or may not have had a target for the scrip and obviously you did not decide before hand as to what is the maximum portfolio loss you are willing to take on the scrip. And ... you see a loss in market as a loss of judgement on your part (howsoever inept or irrational it may have been) and your ego refuses to believe you could have gone wrong in this one. You had to win this. Now how to save face for yourself in your own eyes. Hold till the price comes back ... 1 year, 2 year ... whatever and then you would be able to justify to yourself that you recovered the principle fully plus something (if any). But at what cost. You have stopped taking care of your portfolio because the pain of seeing it is too much. You have lost good opportunities just because you did not call it a day and squared off your position when you should have.

Please note. Everything fresh is good. Old is good only if it is performing. So your portfolio should always have something which is either fresh (and with a promise to perform based on rational expectations or study) or it is performing.