It's OK to Hold Onto Some Losses

Losing is all about framing.

It’s a story that we accept after a certain amount of time. We accept that we lost the girl because she hasn’t talked to us in a while. We accept that we lost our watch because we haven’t seen it in a while.

And most importantly, we accept that the amazing stock we got into at one point is a loser.

It’s never fun to admit. But what if you just didn’t admit it?

The truth is, losing positions have their benefits. We’re in it to make money, of course, but sometimes we make too much. You can’t only make money. That’s not how this game works.

It’s not always going to balance out perfectly. You will make more than you lose at times and lose more than you make at others.

But the undeniable fact is that you will carry losing positions, for as long as you choose.

It can hurt to look at these losers — these pathetic little losers. Wasting your money away, laughing at all of your future goals.

Depending on the circumstance, it can be worth keeping them. If the company is going bankrupt and it’s heading to zero, by all means, get the hell out.

But if you bought it when it was a little overvalued and now it’s fallen back to earth, that’s not always a sure-fire reason to sell.

Could it continue to fall further? Absolutely. That’s a risk you take in this game.

It could also come back up. If you’re in it for the long haul, and you still think it has upside, why give up now?

But, most importantly, it can be worth holding onto losers to lower your tax bill.

If it’s September, and you’re considering selling, think about the rest of your portfolio. If things are going well, how much would the extra cash generated from selling out of this position help?

If it would help greatly, by all means, get the hell out.

But if that money would just sit in your account, consider holding steady. If things don’t turn positive by the end of the year, you can lower your taxable gains by taking the loss.

Stick it out, champ.

Due to some changes happening in my life behind the scenes, I have a lot of time freeing up to write more. I have plans to write each week here, at least once, while also potentially adding a second, premium article down the line (stay tuned).

I also revived my other newsletter over at Substack where I will write the remainder of my thoughts on life and things.

If you enjoy my writing, that’s where you’ll find me! Talk soon.