Today I would like to share something that is rarely talked about on financial platforms: losses.
Not because they are pleasant - but because they are part of the game.
Transparency is more important than perfection, and that's exactly why I'm writing this post.
My portfolio is currently well in the red.
I have bet heavily on Chinese equities because I am convinced that the Chinese economy has great long-term potential. I still have this conviction - but it doesn't save me from the fact that the last few months have been pretty painful.
Of course, I knew that diversification was important. Nevertheless, I was very focused, perhaps too much so. And then there's $3350 (+1,25 %) - Let's just say it wasn't a sober, rational purchase. 😅 Hopefully soon to the moon🚀🚀🚀🚀
Joking aside...
This post is not about pity or justification.
I want to show that there are many of us who are experiencing significant losses right now - and that this is nothing unusual or shameful. It's part of investing.
🔍 Why we often conceal losses
In the community, you often see "+30% in 6 months" or "my portfolio is exploding". Gains are often shared, losses hardly ever.
And this is no coincidence: loss aversion, a well-known psychological phenomenon, ensures that we perceive negative results much more strongly than positive ones. People react twice as negatively to losses as they do to gains of the same size - and are therefore less likely to talk openly about them.
This is also shown by the study "More shareholders in Germany - overcoming indifference and misconceptions" conducted by Deutsches Aktieninstitut in collaboration with the Stuttgart Stock Exchange:
- Many non-shareholders consider share investments to be too risky.
- Losses are given a very negative weighting, whereas gains are perceived more positively.
- Many do not know how risk and time interact: Those who invest for the long term and diversify broadly significantly reduce their risk of loss.
- (Source: Studie, Deutsches Aktieninstitut, 2019)
In short: we like to post profits, we usually keep quiet about losses. Yet they are just as instructive - perhaps even more so.
💡 What I take away from this
Strategy instead of emotion.
Buying out of euphoria (see Metaplanet) rarely brings the desired result. In future, I will make more conscious decisions.
More diversification.
Even if you believe in a region, investing everything in it is risky. I want to diversify more broadly in future.
Think long-term and keep calm.
Short-term losses feel brutal, but they are no reason to panic. If you believe in your long-term investments, you can stay on the ball and benefit from the market. Being afraid when everything is in the red doesn't help anyone - confidence in your plan is crucial.
Maintain openness.
Being honest about my portfolio - in good times and bad - shows that losses are normal. This helps the community to develop realistic expectations.
Learn from mistakes.
Every loss shows where you were wrong emotionally or analytically. I try to recognize these points instead of suppressing them.
✍️ My conclusion
Losses are not a flaw.
They are part of investing - no matter how well prepared you are.
I'm not sharing this to moan, but to show a realistic picture: You see gains everywhere, losses almost never. Both sides are important in order to learn and make better decisions.
If you are in the red yourself: you are not alone.
More important than any number in your portfolio is what you learn from this phase - about markets, strategies and yourself.
And most importantly: trust your long-term investments. Short-term setbacks are normal.
