Staying too long

You can be somewhere too long.

That's a lesson I have learned on a number of occasions. The lesson is nicely illustrated when investing in the currency exchange. Once a position is opened at a certain price, you predict that it will either go up or down from your opening price. There's no turning back once the position is opened. So, if you predict that the trend will be upward, and the trend goes up, you make money. If you predict that it will go downward and the trend falls, you make money. But, if you open the position and the price trends in the opposite direction from your prediction, you lose money.

I have opened a position with a prediction, and the trend went the opposite direction a number of times. The immediate thought is to stick it out and the trend will turn around. Many times that is true. But, you can stay in the doldrums too long. Bad things happen when that occurs. You can exceed your margin for one. Then you automatically lose your money to the brokerage house. I've had that happen. Or it ties up your money for so long before the trend comes back that you lose out on having enough margin for other money to work if it had been available instead of being allocated for the deep sleeper to turn around. Or you could be at historic highs or lows. The price will never be that low or high again, so no turn around is possible and you lose.

The lesson is that you can be in a geographic location too long, in a job too long, or in a relationship too long. Bad things happen. Waiting for the turn around always costs. Fortunately, there are patterns in the way prices move just as there are in the rhythms of life. Most of the time the patterns prevail and you make money or enjoy life.

But, you can be somewhere too long.