HOW TO RECOVER FROM BAD INVESTMENT AND MOVE ON IN 2023
So, Mr. Kunle, a new client who had just suffered some serious loss in a bad investment asked a question: “How do you recover a bad investment and bounce back stronger than ever?” The answer to that question is one that many other people are probably also looking for so we decided to share it here.
It’s new year and many people are starting afresh, making some positive decisions about their lives, dropping some old habits and finishing something that they have started. If you have been unfortunate to have lost or still losing money in a bad investment and you are yet to recover, this is the right time to move on. But how?
First, stop and evaluate the investment:
If your investment has dropped significantly in value and is costing you in terms of cash-flow, it is important to look at the numbers and assess the likely trajectory of this investment over time. In other words, it’s time to stop trying to save it by putting in more money and then evaluate. Like someone said, if you want to get yourself out of a hole, stop digging. Stop throwing away your money on a bad investment – if it is eating away at your lifestyle and offers little prospect for the future, is it worth holding onto?
Now is the time to look at the number, assess your loss and be realistic with your expectations.
Make an Informed Decision:
Having determined that your investment is performing badly, your next question should then be what are the chances of it going up in value? If growth is likely in the future, how much will it need to go up in order for you to break even in your cash flow and capital? It may be difficult to decide these under the circumstance considering your emotional involvement with the investment. So, it is advised that you consult experts and make an educated decision on whether to hold onto it until it gains value, or off-load it and reconcile your losses in another investment. Whichever way, it’s time to act.
Document Your Loss:
Try to document your loss as much as possible. Write down the details if you can. While this may be difficult at first, it will become your reference for future investments. Analyzing all your moves and writing down your findings will help you to gain clarity. This clarity is what will help you to avoid these pitfalls in the future.
Accept your loss and move on:
You must understand that that the investment did not go the way you planned does not make you a bad investor or decision-maker. Investment succeed or fails due to several factors, some of which we have no control over. Every successful investor today has one story or the other to tell. So, accept your loss and move on. As long as we learn from our mistakes and move forward with determination, our failures can be the very things that bring us closer to success.
The number rule of success in life is ” Never give up”. So, while you might have lost some self-belief over your bad investment, you need to start again all the same and apply the lessons you have learnt in your last experience. That the last investment failed does not guarantee that the next would fail. Brace yourself and go again, this time making more informed decisions. You are capable to doing it. Go again. Do you have any questions for us on investment? Do not hesitate to reach out today.