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 shouldn't be picking stocks in the first place.

From [New York Magazine, tweeted by Ezra Klein](http://nymag.com/daily/intelligencer/2015/02/hedge-funds-discover-they-can-invest-in-apple.html):

> 
> New evidence for that reality comes from Goldman Sachs, via Bloomberg News. The investment bank analyzed the holdings of 854 funds with $2.1 trillion in equity positions. It found, first of all, that all those “sophisticated investors” would have been better off stashing their money in basic, hands-off index funds or mutual funds last year — both of them had higher average returns than hedge funds did. The average hedge fund returned 3 percent last year, versus 14 percent for the Standard & Poor’s 500. 
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[Mutual funds do worse than index funds](http://gregsanders.typepad.com/blog/2009/04/mutual-funds-losing-to-the-market-index-funds.html).

> 
> Tangentially-related to the question of whether Wall Street types deserve their compensation packages is the yearly phenomenon in which actively managed mutual funds underperform the market. Between 2004 and 2008, 66.21% of domestic funds did worse than the S&P Composite 1500. In 2008, 64.23% underperformed. In other words, if you had a fund manager and his employees bringing their skill and knowledge to bear on your portfolio, you probably lost money as compared to the market as a whole. That's not to say you lost money in all cases. Just in most.
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The math is really simple on this one. Stock picking is fun, but undiversified and brings you competing with Wall Streeters with math Ph.Ds. and twenty-thousand-dollars-a-year Bloomberg terminals. What do you know about Apple's new iPhone that they don't?

You should compare your emotional reaction to losing 40% in two days to your reaction to gaining 40% in two days... then compare *both* of those to losing 6% and gaining 6%, respectively.

**Picking stocks is not financially wise. Period.**
Try to value the stock as is. If you assume it will bounce back, you're currently not thinking clearly. The new price is what it is, and it will go up or down from here.

If you're quite sure that the price will go up, buy, if you're quite sure that the price will go down, sell, as usual.

If you find that you are unable to objectively value the stock, sell it off. By closing the position you will not necessarily get the best possible price. But by removing a stressful distraction you will significantly reduce the risk of making some expensive mistakes in the near future.