“A long-term investment is a short-term investment that failed.”
This piece of investing wisdom is meant to be funny, but in many cases I find it to be true when people try to speculate on stocks instead of thinking long term. They buy something because they think it will move in the short term and when it doesn’t, they hold it, and hold it, and hold it. Years later they are still holding the short-term investment.
While I don’t advocate speculating on individual stock issues for retirement or other financial goal money, I recognize it can be enjoyable/entertaining to speculate. If you are going to speculate, I suggest using just a small portion of your investment assets, maybe 5% tops. That way if you lose you still are likely able to achieve your major financial goals.
Also, if you are speculating in the short term and the stock goes the wrong way, step back and see if maybe you were wrong and if it is time to get out. (See buying retail stocks because you believed they were value plays and Amazon was just a short-term phenomenon).
If you haven’t recently reviewed your investments you should contact your CERTIFIED FINANCIAL PLANNER™ Practitioner.
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