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.