Sure you can. We do it all the time. A car can’t love you back, yet many of us fall in love with our cars and develop deep emotional attachments to them. Your house can’t love you, but you can sure love your house. I’m not saying we shouldn’t love our car or our house. I think that’s perfectly okay. We tend to take better care of the things we love. If you love your car you will drive it a little easier, you’ll keep it clean, you’ll keep the service up on it, and you’ll usually keep it repaired and in good shape. If you do that your car will most likely be better to you. It’ll run longer, be more efficient and break down less often. So loving some things that can’t love you back can reap rewards for you.
So in that case, is it a good idea to fall in love with your stock portfolio? Absolutely not! It doesn’t matter that your grandfather worked for that company for 40 years and you inherited your shares from your beloved grandma. If the company is now being run by a bunch of nincompoots (that’s financial jargon meaning several incompetent people) and the stock is going right in the toilet, suck it up, know your grandma wouldn’t want you to hold onto a stinker and dump that pig of a stock. Staying in love with it will eventually hurt you. We may get emotional about a company and think that they will automatically take care of us. But the folks that run the company don’t know your family attachment to it. And what’s more, they don’t really care. Their job is to run the company, not take care of your feelings. In the same vein, you shouldn’t hold on to stock because you have that attachment. I have left a beloved stock in many clients’ portfolios over the years. Some did well, but others just dragged down the return of the overall portfolio. So if you are holding a stock because of some emotional attachment to it, take a close look at it and see if it is really something that is likely to help you in the long run. If you’d like us to analyze a company for you, we’d be happy to do so at no charge for any client. The old saying, “know what you own” is a good one to live by when looking at your portfolio.