Is Watching The Stock Markets Losing You Money? Suze Orman's Advice On Selling Too Soon

Personal finance expert Suze Orman recently took to her podcast, "Women & Money," to share the dangers of selling too soon and the pitfalls of constantly watching the stock market. She states that one of the biggest threats to long-term investing success is the tendency to dwell on missed opportunities and make hasty decisions based on short-term market movements. 

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Orman notes a common mistake among investors: fixating on the past performance of stocks they didn't buy. "At some point in your investment career, you look at these stocks like NVIDIA or Apple or Palantir or Broadcom or whatever the stocks would be, or Meta, or things that came out a long time ago," she says. "That if you just had bought them, maybe you would have invested $10,000, and maybe today it would be worth $1.2 million. And you spend all of this time calculating how much money you would have made."

When looking at these top-performing stocks, Orman said that instead of looking for the next big opportunity, investors should continue to look at the top-performing stocks as an opportunity because they "have so much further to go." 

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Orman emphasizes that being afraid that stocks like these have reached their cap can cause people to miss out on significant gains. She encourages investors to be more patient and trust in the long-term potential of their investments. 

Watching stock prices fluctuate daily can lead to emotional reactions and poor investment decisions. "If I was to tell you about the biggest mistakes I have ever made investing, it would be selling too soon," she said. 

Then she shared her experience when she bought some stocks; after they went up 50%, she sold them. But the stocks continued to go up another 50% and beyond. "But of course, when you’ve sold something that you’ve made money on but that continues to go up, you sit there hoping that it would come back down so that you could buy it again."

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Beyond selling too soon when constantly watching the stock markets, Orman shared that many people tend to "freak out" when they see daily fluctuations and watch their investments drop after just a few days. "You just need to know that over the long run, they’re going to be doing ok," she says. "But the key, truthfully, to your investment success is to have the courage that if you bought something and it now has gone down and you have extra money, to buy more."

Investopedia has shared insights into fluctuating stock prices and stresses the importance of not "panic selling" stocks when the market fluctuates. In March 2020, the S&P 500 plunged 35% in just over four weeks, sending investors into a panic. But it rebounded from those lows and has hit several record highs since. In 2022, the market dropped again and continued to look volatile through 2023. But in 2024, it set more record highs. 

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Investors like Warren Buffett and Jack Bogle have also stated that staying on course is important when stocks drop. Bogle told CNBC that it's best to buy stocks and hold them; otherwise, "your emotions will defeat you totally" if you try to sell to avoid losses. 

Fixating on missed opportunities in the stock market and making hasty decisions based on short-term fluctuations can lead to much greater losses. By adopting a disciplined approach and resisting the urge to sell too soon, investors can better position themselves for long-term success.

Consider consulting a financial advisor for personalized guidance tailored to your individual financial situation. This professional support can help you develop an investment strategy that aligns with your long-term goals, providing peace of mind and a clearer path to financial security.

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