Then, we multiply 3.03% times the total value of our portfolio. We determine a position size by first calculating “1 / X” where X is the number of constituents in our portfolio. Right now, we’re down -36% on our TeamViewer holding with one position size worth of capital invested ( roughly 3.03%).

Revisit original thesis and key metrics.

Assess position damage and establish plan of action – keep buying or wait?.

Whenever a stock starts hitting the skids, here’s what we like to do. We’ve asked ourselves “why is TeamViewer stock price falling?” a number of times, and so have our subscribers. People always ask Google “why is stock X falling,” but never “why is stock X rising.” That’s loss aversion on display, and we’re not immune to it. And that’s precisely what’s been happening with TeamViewer AG ( TMV.DE). That’s not a bad thing, but it feels bad, especially if the stock keeps sliding slowly over time in a dramatic fashion. While we can’t explain why, as investors, we all know that this now “feels better.” When a stock keeps falling and falling, there’s a temptation to keep buying and buying.

Put as much capital into the stock as your original purchase, and the loss decreases to -15%.

If a stock you’re holding drops -30%, here’s how to make some of that pain go away. This is referred to as loss aversion, and it wreaks havoc when managing a portfolio. Studies show that the pain of losing is psychologically twice as powerful as the pleasure of gaining.

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