Hello all! I feel a little naive. I’ve been investing for 7 years now and have always been a dollar cost average index fund guy. I’ve seen the benefits of it… although the market has also always been on the up and up really since I started investing. After March last year I started talking to a coworker about motley fool which he was big on and decided to give the service a try for a year. I started using motley fool in September and have had extremely good results investing in Individual stocks namely growth stocks. I was only using a portion of my roth IRA to start but saw the incredible returns and slowly started exposing my 401k and my wifes roth IRA after the new year. However since then growth stocks have taken a big hit due to rising bond yields and I’ve lost nearly all my gains in my roth and now am at a loss in my wife’s IRA and my 401k. (On the year not overall). I want to move my money back into index funds to be more stable but its hard to sell where I’m at now knowing where I was at literally a month ago. For instance I have some growth stocks that had 200% returns by last month and now that I bought them in different accounts I’m at 30 and 40% losses as they have pulled back. Any insight in how best to reallocate? Should I take it as a lesson and rip the bandaid to get back into indexes or should I slowly sell positions as they come back up? Thanks for any advice you all may have.
Ty,
Number 1 rule of investing is invest only in what you know and believe in. So ask yourself: Do you truly believe in the company value and the potential of the growth stocks that you bought? If you truly believe in its value and potential when you first bought it, the sudden dip as a result of the rising interest rates shouldn’t change your opinion of the company potential. But if you don’t believe in its growth potential, then it’s best to get out while you still have gains.
May I ask what growth stock did you buy that is giving you concerns? My guess is the stock market will start to go up again soon in the next few weeks after the public reaction to rising interest rates have waned. With growth stock, you have to expect big gains and big losses in the short term - they’re very volatile. And if you believe in the company, this market dip is a big sale for you to buy more and dollar average cost it. 
Mindi,
Thanks for the reply.
I had been a devout index fund, DCA fan since I started investing in 2013. However, I started using Motley Fool and listening to their principles and feelings “naively” confident. The market has a way of humbling you. I just am feeling a bit shocked as I went from an all time high to losing all of my profits in less than 2 weeks. I still think that the companies that I own are good businesses. However I realize that I got a little carried away and made my portfolio difficult to manage. The Motley fool recommendation is to own atleast 10-15 different stocks and never have more than 2% of your entire portfolio in any one stock. I have followed that and looked at it as if I was building my own mutual fund. So over the past 6 months of investing I’ve bought into 40 -50 different companies. I’ve seen good results with many of them. 2 weeks ago I had fewer than 5 of my stocks returning negative with only 3 more than -10%. While I had the other 30-40 stocks returning over 10% or more with like 5 stocks returning over 100%. But once the rising bond yields started everyone moved out of many of the growth stocks i had been in and I saw massive pull back. I still feel confident in my portfolio but really just want to shorten up positions in many of the companies that I own so that I’m majority invested in indexes with minority in individual stocks.