Major investment loss
Structured approach: assess, contain, recover, and rebuild confidence in future investing.
PHASE 1: Assess & Contain
-
Document everything:
transaction records, statements, and communications.
-
Quantify impact:
separate realized from unrealized losses and understand tax implications.
-
Stop cascading actions:
avoid knee-jerk liquidation without a plan.
PHASE 2: Seek Advice & Resolve
-
Consult professionals:
financial advisors, tax professionals, and legal counsel where appropriate.
-
Explore remedies:
claims, insurance, or negotiated recoveries if misconduct occurred.
-
Plan taxes:
use losses strategically for tax-loss harvesting where allowed.
PHASE 3: Rebuild Strategy
-
Revise risk limits:
update asset allocation and position sizing rules.
-
Start small:
re-enter markets with a conservative plan and clear stop-losses.
-
Document lessons:
write a postmortem to codify what went wrong and how to prevent it.