What do you do?
Yesterday, shortly after I posted my blog about STX, I was surprised to see Seagate Technology Holdings drop almost 10% in crazy trading. Because we are very diversified, our accounts beat the S&P 500 index, but we would have done better if STX had not fallen so far. When you own 1,600 shares, and the stock drops $9.52 per share, you see $15,232 “disappear” from the value of your shares. How do you react? What do you do?
Three Things to Do
The first thing I did was to look for any news related to STX that said my original view of the company was in error. I found nothing of any significance. Perhaps the Robinhood day traders were abandoning ship.
The second thing I do is remind myself that one day is just a fraction of 365 days. I remember patience is a key investment mindset.
The third thing is to do nothing or buy more. I decided to do nothing. However, I was sorely tempted to buy more. Bear in mind that the Ex-Dividend date is coming. When the price of the shares goes down, the dividend yield goes up. Buying stocks when others are selling can be a wonderful opportunity for a dividend growth investor.
Cindie and I own 1,600 shares of SXT as a long-term investment. However, I do sell covered calls on my shares from time to time. Then I often rebuy the shares if they are called away.