Do you have regrets after losing some money? Specifically your friends were ‘winning’ so much money from the stock market and you have that FOMO (fear of missing out feeling)? Unfortunately, the unlucky one is always us. Our friends usually buy much earlier and when they were celebrating, we went in and that’s when we start losing. Nightmare of selling with a loss or holding on and see the price dropping further has started. The stock market is quite volatile, especially for stocks which has relation to the COVID-19 pandemic and the expected potential vaccine.
If you were one of those who bought the glove stocks and held it until it went to the peak and sold it for a super huge profits, congratulations. If you were one of those who kept buying at the wrong time and kept losing money when it seems everyone else around you are earning big money, you are not alone. If you have done nothing in the stock market thus far, it’s perfectly fine. Go invest into something else. The world does not move only because of the stock market.
Now, what happens if we lost US$41.4 million? (RM172 million) and we lost this amount of money through continuous short-term trading of stocks? Here’s the story.
Article in finance.yahoo.com . Yusaku Maezawa is a Japanese billionaire. His networth for 2020 has dropped by S$215 million and because of this, his networth is now only at US$3.5 billion (RM14.54 billion) according to Bloomberg-compiled data. He said he lost money in day trading and that this is a skill he has failed to master.
Regrettably, he said, “I was blinded by the virus-driven market swings and lost 4.4 billion yen through repeated short-term trading of stocks, something I haven’t familiarized myself with. With 4.4 billion yen, how many people could the money have been given out to and saved? There’s no end to this regret.” There are other interesting details about him too. Just read the full article yeah. Article in finance.yahoo.com
Risk appetite versus ability to assume risk are different
Some of us believe the market is on our side. We borrow to “invest” everything with the aim of getting everything back plus profits soon. By the way, the soon could always be at the wrong side and it may not be profits. It’s super important that we think of investment as an investment and not as a gamble.
Mr. Yusaku Maezawa did not borrow to do day trading. He was already a billionaire. He also did NOT trade using all his money. That was why his position as a billionaire is still intact even after losing RM172 million. Question is, how many of us could even afford to lose just RM172,000 and still keep a millionaire status? This is why risk appetite must be managed based on ability to assume those risks. When it comes to either succeed or fail totally, that is NO longer an investment. It’s just a gamble. Do not regret only after it has happened. We may not be able to stomach the actual loss…
To stay away from regrets from negative fluctuations, there’s Real Estate Investment Trust (REITs) too which is usually much less volatile and will provide a stable dividend income instead. Else, those typical dividend stocks perhaps. Happy buying stocks and managing our risk appetite…
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