Question: Right after the event, I felt shocked and depressed. I've been engaging in stocks for about a year now but I've never encountered such a big jump in such a short time. What I'm planning to do is just wait for it to rise again, which I'm not sure when. (Well, who is?)

**What should my mindset be?** 

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I understand that there are already lots of questions regarding **When should I sell?** or **Should I set a stop loss?** For me, this question is not 100% about how to protect your money, but it's more of **In extreme cases like this, how should I mentally prepare myself?**

I anticipate that there will be comments/answers like "we can't give advice if we don't know the exact stock in topic" or somewhere along those lines. I want to pre-emptively tackle this and say that this question is not only for my specific current case. I'd prefer answers to be generic for everyone facing the same problem.

Answer: 
You bought the stock at some point in the past. You must have had a reason for this purchase. Has the recent change in price changed the reason you bought the stock?

You must assume your losses are [sunk costs](http://en.wikipedia.org/wiki/Sunk_costs). No matter what action you take, you can not recover your losses. Do not attempt to hold the stock in the hopes of regaining value, or sell it to stop losses. Instead approach this event as if this very day, you were given shares of the company's stock at their current market value for free as a gift. In this hypothetical situation, would you hold the shares, or sell them? Use that to judge your options.

Not everyone, myself included, can handle the mental stress of watching share prices change. You can always consider trading index funds instead, which are much less volatile but will provide consistent, albeit, boring returns. This may or may not be you, but it's an option.

Finally, do not keep money in the market you are not prepared to lose. It seems obvious, but if you lost 40% today, you could lose 100% tomorrow.
Have the reasons you originally purchased the stock changed? Is the company still sound? Does the company have a new competitor? Has the company changed the way they operate?

If the company is the same, except for stock price, why would you change your mind on the company now?

ESPECIALLY if the company has not changed, -- but only other people's PERCEPTION of the company, then your original reasons for buying it are still valid. 

In fact, if you are not a day-trader, then this COMPANY JUST WENT ON SALE and you should buy more.

If you are a day trader, then you do care about the herd's perception of value (not true value) and you should sell.

DAY TRADER = SELL

BUY AND HOLD (WITH INTELLIGENT RESEARCH) = BUY MORE