The Key Components of Loss Acceptance


As you know, there is no way to guarantee profit from your investments. This means that no matter what, you risk losing money when you choose to trade. Loss is something you have to accept if you want to make it as an investor. Understandably, it hurts to see your investments take a hit—no one wants to lose money. But loss is part of the investment journey, and it's necessary to be aware of this when you start placing trades. You won't profit every single time. Remember to keep your long-term goals at the forefront of your trading decisions when it comes to loss. You may have taken a hit, but how can you use this as a steppingstone for your next strategy to get yourself back on track?

Stop and Think

Try not to react right away when you take a loss. This can result in emotional investing, and lead to even more losses. By letting your emotions take over, you might try to overcompensate and lose sight of your long-term goals. Before making any kind of adjustment, take some time to let yourself wrap your head around the situation. Think about what got you to this point, allow yourself to be upset about the loss, and level out before jumping back in. What happened to bring you to this particular loss? Did you make a mistake you can note for the future? Figure out what exactly occurred and write it down to help you when it comes time to reevaluate.

But, don't make any decisions before you've taken a step back. It's crucial to return to your investments with a clear mind to ensure that you're thinking about the next steps of your situation logically. If you find it may be helpful, talk to a financial advisor about your situation and they might be able to help you avoid making any additional mistakes. While you're reflecting on the situation, spend some time doing things you enjoy, and try to get yourself back into a positive headspace. This can ensure that when it's time to think about your investments again, you can do so in a happier, healthier state than when you initially found out about your loss.

Consider Your Strategy

If your strategy brought you to take a significant loss, it might be time to change it. Not every strategy is suitable for every investor, so it might take some time to find one that works better for you and your needs. If yours didn't work out, don't worry—this is just part of the process. You may be knowledgeable enough to test out a few new strategies with paper trading and can try out some ideas before choosing on you'd like to implement. If you're less experienced, take some time to read up on things you may not be as familiar with. Even if you are an experienced investor, there's always something new to learn. Checking out the Learning Center can provide you with new potential trading ideas or teach you something about investing you may not have already known. When you educate yourself, you provide yourself with new tools to help you on the next part of your journey. This way, your loss is a learning experience, and you can use it as a jumping off point to further your career as an investor as opposed to letting it hold you back.

Move Forward

Once you've thought about how to change your methods and are ready to get back to investing, you can start to move on. If you've taken the right steps, you should feel refreshed and ready to make smart choices for your portfolio in order to properly recover from your loss. With what you learned from this experience, you can take your loss and use it to grow and become a more informed investor. Loss happens, but it doesn't have to define you. When you choose to accept the reality of a loss and are able to move forward, you can continue to learn, grow, and find new ways to utilize your skills and make more informed decisions. Just remember that you can't be certain that any of your trades will be profitable, and any investment involves risk. But, with the ability to accept losses and recover properly, you can find success on your journey.

Recently suffered a loss and looking to try out a new strategy? Practice on paper trading today!

Disclaimer: Securities trading is offered to self-directed customers by Webull Financial LLC, member SIPC, FINRA. All investments involve risk, including the possible loss of principal. You should consider your investment objectives carefully before investing. This is not a recommendation, investment advice, or a solicitation for the purchase or sale of a security. Additional info: