How To Handle Stock Market Losses (Tips From A Psychologist)

 

One of the worst or saddest things that can happen in your life as a stock trader is to experience a significant loss in your stock market investments. It can be frustrating to realize that all your efforts have gone to waste because you still ended up losing some bucks. According to a psychologist, the feeling of dismay and disappointment is only typical for someone who has experienced such an unfortunate event. As such, it is okay to give yourself some time to mourn about what happened. However, you must not succumb to frustrations for a long time. The best way to handle or deal with the situation is to stand up once again and continue the fight.

 

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In this article, we are going to share some of the things that you need to do if you want to become better at handling stock market losses. Below are the things to remember:

 

Let It Sink In

 

It can be challenging on your part to accept what has recently happened in your investments. For sure, it will take you a lot of time to realize that all your money has been watered because of an error you made in the past or due to some circumstances that are beyond your control. Hence, it is suggested to let the said occurrence properly sink in before you do anything. If you are still lost about what happened, then do not force yourself to feel okay right away. Sometimes, you need some time alone to comprehend what took place entirely.

 

Know Your Mistakes

 

Now that you have already accepted the fact that you have stock market losses, the next step is to determine where you committed errors or mistakes in judgment. Did you place your money in a losing corporation? Did you sell your stocks early? Did you engage in insider trading or fraudulent activities? The answers to these common questions will help you to see where you went wrong so that you can be aware of what to avoid in the future. Be honest with yourself about your mistakes because it is the only way to forgive yourself for what happened. “Self-compassion is being gentle with yourself, not beating yourself up over your past decisions, and accepting that you are human and make mistakes.” A reminder from therapist Kimberly Hershenson, LMSW.

 

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Talk To A Financial Advisor

 

At this point, you may want to consider discussing your problems with a financial advisor. However, before you contact one, it is crucial on your part to accept the realities that there are many things about finance that you are not aware of. In so doing, you can prepare yourself for your meeting with the advisor. It can also help in reminding yourself about humility so that you can have a more open mind in listening to the advice of a professional or expert. Make sure that you continue to let the said person guide you on what to do next after experiencing a significant loss in money. “When it comes to your money, you always have the power to make a difference, so recognize that choices exist for you to improve any financial problem.” Bahareh Talei, Psy.D. said.

 

Find A Lawyer

 

If your loss in the stock market is big enough that it already involves some legality, the best and ideal thing to do is to get in touch with a lawyer. Make sure to do it as soon as possible so that you avail of the proper remedies provided under the law. Remember that the lawyer is the best individual who can help you get out of any legal mess that you may have gotten yourself into because of stock market trading. Do not rush the process of searching a legal counsel to represent you in all negotiations or even civil cases, depending on what happens after experiencing a financial loss.

 

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Get Back Up Again

 

As already emphasized above, you have nowhere to go but up when it comes to surviving such loss. Keep in mind that just because you suffered a financial problem does not mean that it is the end of the world. You can try again and start making better decisions for all your investments. On the other hand, if you feel that you have lost your interest or passion for trading, do not hesitate to give it up. Instead, invest your time and effort into trying something new. For example, you can start your own business again, which you can use as a source of income.

 

Conclusion

 

“A stressful change in life patterns can trigger a depressive episode. Such stressful events may include a serious loss, a difficult relationship, trauma, or financial problems.”  That is according to Ben Martin, Psy.D. Experiencing a significant and serious loss in the stock market industry can be a challenging situation to handle. What is essential is to remind yourself that nothing is impossible constantly. Remember that what you are going through is only a temporary phase in your life as a stock trader. Never give up easily just because things have been difficult.

 

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