If you make an investment mistake, learn from it instead of just beating yourself up. Everyone makes investment mistakes. You can recover. Behavioral economics tells us that many amateur investors hold onto stocks that have declined, hoping they will rise again to at least break even. The reason for this is loss aversion. When you sell the stock, you have to admit your mistake and feel the loss. A diversified portfolio like an S&P 500 Mutual fund, will surely rise again with the market, but more than likely this will not happen for a start-up or a small company. A diversified portfolio will sooner or later deliver average returns, but a single stock could go bankrupt. If a stock is significantly down, and the company has fundamental financial issues, dump it and move to a better (diversified) portfolio.
Introduction
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Your First Big Job: How to Get It
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Flourishing in Your Job and Well-Being in Your Life
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The Importance of Behavioral Economics
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What is Money?
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Analyzing Your Current Financial Situation
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Budgets and Saving
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Credit Cards, Auto Loans, and Other Personal Debt
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Student Loans
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Understanding the Time Value of Money
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Banks and Financial Institutions
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Buying a Home
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Insurance: What Do You Need?
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Investing Fundamentals
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Investing in Mutual Funds
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Saving for Retirement
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Fiscal Policy and Monetary Policy-Government Intervention in Your Life
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