A key strength of good investors is being able to handle disappointment and failure. In fact, no matter how intelligent, experienced and skilled you are at investing, mistakes are a cast-iron certainty. That’s because even the best investors cannot consistently and accurately anticipate all challenges that a company will eventually face and, while the risk/reward ratio may have huge appeal at the time of purchase, things always change in the business world.
The problem, though, is deciding exactly what to do with the shares that turn out to be disappointing. Clearly, they can fall into any number of categories, with examples being stocks that have plummeted to be worth a small percentage of their original value all the way through to companies that may be in positive return territory, but which have lagged their industry group or the wider index.
