I feel compelled to write a short blog post on this because it’s so important in the world of equities. Bulls and bears are always fighting and everyone has an opinion. Analysts covering a stock and forecasting future earnings, growth and price targets can even be misaligned. It can be easy to end up confused about what to do and what decision to make.
The reality is, when you’re looking at making a decision about a stock, your money is on the line. No one will care about your money more than you. So who better to trust with your own money? That would be you!
Trust your investment strategy and more importantly, continue to improve and refine it to build up a competitive edge over the long-run. That’s what I try to do.
In the world of equity markets, you can get bombarded by news (articles, TV shows covering stocks, News channel interviews with industry expects), social media, talking to friends, etc… to the point where you can end up conflicted with what decision to make. I’ll give you a perfect example with TSLA. I added this stock to my portfolio at $212 on Jan 22, 2024. It reported earnings on Jan 24, 2024 and gapped down from $207 to close at $182. The lowest it hit was $175 on Feb 5, 2024. Clearly the market thought their earnings release was less than stellar. I won’t get into the ER details, however I am sticking with my thesis on this stock that it’s not simply an EV manufacturer. I see TSLA as a technology company, an electric vehicle just so happened to be what they put their tech into. Some analysts were predicting this stock would hit $150. Don’t get me wrong, I have no idea if this stock will hit $150, that’s not my point. I believe the stock has merit to move higher and I am sticking to my investment thesis for this stock. My time horizon also isn’t to make a profit short-term, I am betting that this stock will continue to be a leader in innovation over the next 5-10 years. The market action hasn’t shaken my decision to continue holding this stock into my portfolio.
The only thing that should matter when making your investment decisions is your investment strategy, your thesis on each position within your portfolio and monitoring if and when a company’s current state is not meeting the investment thesis you’ve laid out.
Make decisions on your own terms for your own reasons. It’s best not to end up feeling like there is someone or something to blame if things don’t work out. When you have control over your decisions, you also have control to continue refining and improving your approach.