Kiplinger: How Losing Stocks Are Like Ex-Spouses

Published on 04 January 2016 by

Category: News, Updates

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By Kathy Kristof

It took me 16 years to leave my ex. But I wanted to get divorced from my hurtful investments more quickly, so I called a couple of financial therapists.

One of the top women on Wall Street recently told me that females tend to “marry” their investments. The comment hit home. As I mentioned in my column last month, I have a strong aversion to selling stocks, and that, I now realize, is a flaw that has hurt the performance of my Practical Investing portfolio.

The problem has been particularly acute over the past year, as I watched a number of my stocks slide steadily and I reacted by doing nothing. Well, not exactly nothing. What I did was make excuses for the companies, much as I used to excuse the behavior of my former husband: “It’s restructuring.” “The whole industry is in a slump.” “Currency swings.” “China.”

It took me 16 years, including a few in therapy, to finally leave my ex. But I wanted to get divorced from my hurtful investments more quickly, so I called a couple of financial therapists.

Brad Klontz, who is cofounder of the Financial Psychology Institute and who is also divorced, immediately understood the analogy. “You think that if you just hold on long enough, things will change,” Klontz told me. “This hope distorts your vision of reality. To sell—to walk away—means you are making your mistake real. It hurts. You suffer through all kinds of regret. No one wants to feel that, so you kick the can down the road, hoping that it will get better.”

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