READER QUESTION: "Should I be worried or not considering my losses?"



Q: "The attached picture is my portfolio as you can see the total loss is pretty big. I’m new to investing in only 18 and don’t know if at these type of moments I should be worried. My portfolio consists of AAPL, MSFT, SBUX, HBF, TD, RY, and O. Please don’t judge me as I said I’m new with not much money to invest. Only asking for an opinion if I should be worried or not considering my losses. Im not stressed and I am not even tempted to sell anything I just want to be sure and see others opinion."

A: If you are wondering whether you should be worried or not, then you are worried.
The good: your young age and you're investing. The bad: your portfolio is small and undiversified. The ugly: uncertainty leads to fear which leads to selling.

My opinion: reexamine your risk tolerance, know your investment time horizon and then ask yourself again if it makes sense to be in stocks - can I handle the short term unrealized losses or am I going to bailout if things get too heavy? If you cannot handle the risk, that's fine, but adjust your investments accordingly.

My advice - due to the size of your portfolio and lack of diversity, you'd be better off in a mixture of low fee ETFs that give you exposure to many stocks like the Vanguard Total Stock Index ETF. You have age on your side, so dollar cost average into the ETF each month if you can. This way you take advantage of up and down prices.

Think very long term and don't get discouraged on short term selloffs, you have many years ahead of you and the market has always moved forward throughout history.

Comments

Post a Comment