There are great days in the investment world, and there are bad ones. And when a bad investment day occurs, folks who Robert Tweed has seen and worked within investing often take it personally. And why not? Many times, Robert Tweed reminds folks, there is really no one else to blame except one’s self. Despite all the work, research, gut feelings, and prior wins, sometimes an investment just goes south and there’s nothing one can do about it. Anyone who’s been investing long enough eventually experiences a serious loss. Yet, Robert Tweed notes, it’s a crossing point for many; the painful experience helps influence whether folks will continue with investing again, smarter and better, or quit altogether. And Robert Tweed has seen a lot of investors quit from a bad loss, even those who’ve been in the market for a long time.
Drops, losses, and pitfalls do have educational value, and Robert Tweed advises that shouldn’t be ignored. They teach us not to be impulsive, to avoid get-rich-quick promises that are far too good to be true and to follow the examples of those who’ve invested before us and learned things the hard way of what not to do. Most importantly, Robert Tweed points out, failures and losses give us experience, which can also turn into confidence and tempered understanding of how to avoid mistakes in the future with financial moves.
Understand Your Humanity and Let Go
A key principle in learning effective investing is accepting that you are not perfect. You are human, imperfect, and that means you will make mistakes. And folks who are really good at investing have made a lot of mistakes to get to their level of expertise. When an investment is going south, it’s time to let it go and not be personally tied to it or emotionally. Sell the asset, learn from the mistake, and try not repeat it again. But don’t get lost in a cycle of beating yourself up over the loss.
Reflection is Good, Fear is Bad
The beauty of history is that it illuminates mistakes so they can be studied objectively, without being caught up in the pressure of the moment. Reflecting on what you did with prior investment moves is good, advises Robert Tweed. It is how you build experience, identify good and bad strategies, and also develop personal resilience to scary investment changes in the future. However, don’t let yourself get caught in the broken-record syndrome, that the same situation will lose your money again. The investment world Robert Tweed sees going forward is extremely fluid and changing all the time. The conditions of losing money one day may very well be how to make money the next.
The Only Way to Win is to Play Again
Investment wins and gains aren’t handed out as free tickets to the fair. You have to get back into the market with a new position, Robert Tweed advises, find the opportunity and strike when the gain is present and real. And, most importantly Robert Tweed reminds folks, make a profit by actually selling versus just believing in paper positions. This only happens by actually investing again. Many folks get scarred by a bad loss and never return again or even think about investing. This is when irrational fear is running the show. Just as much as there is the potential for a loss, there is the same for a win too. But folks have to take a risk again to be able to win.