QUOTE(Vanguard 2015 @ Feb 18 2021, 01:53 PM)
IMHO, 3 things to consider with losses incurred from stock investment.
1. Our age when we suffer the losses. If we suffer the losses when we are in our 20’s and 30’s, the losses will usually be smaller and we can rebound from it.
But when we suffer huge losses in our 40’s and 50’s, it will be difficult to rebound. Our financial commitments will be higher with housing loans, kid’s education, supporting our elderly parents, etc. We also have less years ahead to earn back the money.
2. The amount that we lose in proportion to our net worth. When we lose RM20K, is that -20% of our net worth being wiped out? If so, this may put a dent in our financial planning ahead.
3. What did we lose? Did we lose money that we can afford to lose or is the money from our margin account, personal loan or money meant to pay next month’s housing loan? If so, then big trouble lies ahead.
Thats why i dun dare to use margin/contra account anymore.....
during 2017, when i'm still greenhorn, relative ask me to open an account because he was the remisier there.....and i follow him play warrant.... burned 8k....and i close the accounts.
last Nov 2020 decide to learn again and dun touch contra/margin...... currently at paper loss SPX 4.5k......but SPX was my 1st few stock that bought since the beginning.... Thats why penthouse...