fbpx

I stumbled upon this interesting term  “One Night Stand Investment” from Investopedia.com today, it means “Buying a security with the intention of holding it for the long term, but subsequently panicking and selling it the following day.”

Investopedia further explains that “An investor sells out the following day typically because of bad news or a sudden change in long-term expectations”.

From my experience, the reality is just the opposite. Many investors buy a security with the intention of selling it the following day for a quick gain, but subsequently hold it for the long term if the stock price drops ever since.

When I do portfolio review for my clients, many of them hold shares from many different companies. Most of them are usually penny stocks which have dropped substantially in value in the past years. It is easy to understand the situation because many of these stocks were bought with the intention of one night stand, but end up became a long term commitment.

Just like one night stand, short term happiness always leads to long term pain.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • Wow I don’t know of this term too, I guess it just wasn’t popular amount the pips. “One Night Stand investment – Buying a security with the intention of holding it for the long term, but subsequently panicking and selling it the following day.” Thank you, I have a new investing vocabulary today

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
    >