Monitor the Stocks You’ve Sold

Posted on 21. Oct, 2005 by in Saving & Investing

When buying stocks, or any security for that matter, you spend (hopefully) a large amount of time investigating your potential little money-maker. Then you most likely spend time every day or so monitoring that stock to see whether you should hold or sell. Then, when the time comes when you contemplate letting your security go, you spend even more time deciding whether now is the time, or if you should grit your teeth and hold on.

Something that you probably don’t do is monitor the stocks that have already gone the way of your 72′ Beetle. Monitoring stocks that you have sold was a new concept for me as well – probably because I figured that time invested in monitoring those securities would be time wasted since I had already sold and any loss I took was a sunk cost. But I never until now realized the potential learning that can happen once you monitor what happened after you sold. Most of us assume that the security’s price continued to decline – and we assume we were smart enough to get out while the money was good. However, is that the true story?

The next time you sell a security, keep it on your portfolio watch list and see what happened to it after you sold it. Were you right in your assumptions that convinced you to sell it in the first place? Perhaps the methods you use to value a company’s stock price or value is not as great as you thought it was. Try it, and come back and post your experiences…

Trackbacks/Pingbacks

  1. BeancounterBlog.com » Blog Archive » Watching Your Financial Weight - March 10, 2006

    […] The principle behind the story is to examine your personal finances in a way that you might not have before: by comparing them to something else comperable. The idea is similar to a similar post I wrote a long time ago on going back to see how those stocks you sold are doing today. By examining what you passed up or chose not to invest in, you can see if it truly was a good investment. In the same way this piece has you divvy up your money in a slew of different ways, so you look at your financial life from a variety of angles. To that end, the story lists these 10 simple calculations that you can read in their entirety here: […]

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