In contrast, missing out on an opportunity entirely tends to feel less painful. There are countless stocks and investments we could have bought but didn't; it's part of the investing experience. This sense of "missed opportunity" doesn't carry the same personal weight because we never had ownership or the initial success of seeing it rise. When we miss out on a stock that we never owned, the regret fades more easily, especially since we know there are always new opportunities ahead.
For example, I sold my Schwab (SCHW) stock too early at $73.50 per share. Looking back, I could have earned more if I had waited, but I've chosen to focus on the positive. Yes, I sold early, but I still made a solid profit. At that time, I made the best decision I could with the information I had, which is an important aspect of investing. Although hindsight might suggest I should have held on, I would rather have taken a profit than risk seeing it go down.
Here are a few key reasons why I believe selling too early is more difficult than missing out:
The Power of Psychological Ownership: When we own a stock, we feel a sense of personal commitment. Selling early can feel like giving up on something we believed in, and it's harder to let go because we actively chose it in the first place.
"What Could Have Been" Mindset: Selling a stock prematurely can make us second-guess our decision. We often imagine what could have been if we had just held on, and it's easy to feel as if we missed a chance at even greater success.
More Lasting Regret: Selling too early can lead to longer-lasting regret than missing out because it's based on a choice we made with a stock we already held, rather than a potential opportunity we simply never pursued.
Risk Management and Positive Framing: A big part of investing is managing risk, and sometimes selling early is the right decision to protect gains. In my case with Schwab, I took the conservative route and still profited. By framing the outcome positively, I focus on my achievement rather than the missed potential.
Learning to Trust Initial Analysis: Selling too early teaches us to trust our original investment analysis and to be more patient. While I might have missed additional gains, I can use this experience to refine my strategy for the future, learning to hold onto stocks when I have confidence in their longer-term potential.
In the end, both scenarios—selling too early and missing out—are a natural part of investing. Selling prematurely feels harder because it involves a conscious choice to let go of something promising. Yet, by reflecting on the positive outcomes and learning from each experience, we can become more resilient and disciplined investors.
Modify on 2024-11-15 12:42
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