Learn­ing the Hard Way

Austin American-Statesman Sunday - - PERSONAL FINANCE EXTRA -

I bought shares of Sirius XM Hold­ings and Taser In­ter­na­tional at their highs. I don’t think they will ever get where they need to get so I can get rid of them. I paid too much for both, and I just keep hold­ing. Oh well, I’m learn­ing. — D., on­line

The Fool Re­sponds:

Your story of­fers sev­eral lessons. First off is the im­por­tance of pa­tience. Taser, which has been re­dubbed Axon En­ter­prise, is still un­der­wa­ter for you, but Sirius is up about 23 per­cent as of this writ­ing, since you wrote to us. Stocks rarely be­have ex­actly as they’re ex­pected to.

Next, don’t think so much about a stock’s highs or lows. A stock that has fallen to a 52-tweek low can still fall fur­ther, while a stock that has dou­bled or tripled can still keep ris­ing — over the short or long term. It’s more help­ful to try to fig­ure out what a given stock (one tied to a healthy and grow­ing com­pany) is re­ally worth and then aim to buy when it’s un­der­val­ued. That way it will be more likely to rise in value than to fall.

Fi­nally, if you have lit­tle faith in any hold­ing, un­load it — no mat­ter whether that will de­liver a gain or loss. What­ever money is left in it can be re­de­ployed into a stock in which you do have a lot of con­fi­dence.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.