What Selling Near the Bottom of the COVID Crash Taught Me

Do you remember how this chart felt in early 2020?

COVID-19 cases were climbing every day. The headlines kept getting worse, and the market seemed to fall with every new update.

Now compare that with what was happening in the stock market.

At the time, I had already been actively investing for a while. I had some successes, some losses, and I thought I knew how to stay calm when markets became volatile.

But this was different.

Day after day, I watched more of my portfolio's value disappear. Every morning brought another wave of red. And somewhere in the middle of it, I convinced myself the market would keep falling forever.

"What if this is only the beginning? What if I lose even more?"

Honestly, I wanted the pain to stop more than I wanted to be right. Being wrong for one more week felt unbearable.

So I sold my positions.

Then the market turned.

It ripped HARD.

Selling was painful. Realising I had sold almost exactly at the bottom was ten times more painful. I had spent years believing I was disciplined, but in the middle of COVID, fear took the driver's seat.

Here was the uncomfortable lesson.

I entered those positions as a long-term investor. But when prices fell far enough, I started behaving like a short-term trader.

Fear does not always make us behave irrationally in an obvious way. Sometimes it gives an emotional decision a very logical-sounding explanation.

An investment should not become a trade just because the market becomes frightening.

And a trade should not become an investment just because it loses money.

I see the opposite mistake all the time.

You enter a stock because the chart looks good. Maybe there is a catalyst coming. You have a set time frame, a profit target, and a stop loss. From the start, you know it is a short-term trade.

Then the stock moves against you. You are supposed to get stopped out, but somehow, you are still holding it.

That is when you suddenly become a long-term investor.

“Just hold lor. Anyway, it’s a good company.”

But let’s be honest. If the stock had gone up 10% in two days, you would probably have followed your plan and taken profit.

That is not conviction. That is loss aversion. The pain of admitting the loss has become stronger than the commitment to follow the plan.

During COVID, fear told me, "Get out before it gets worse."

In a failed trade, fear says, "Just keep holding until you are right."

Different direction, same broken rule. The position became uncomfortable, so we changed the story to avoid the hard decision.

This does not mean you should never change your mind. Facts change. Businesses deteriorate. Investment theses can break, and trading setups can fail.

Changing the plan is not the mistake. Changing it only because the position hurts is.

The cost is bigger than one bad decision.

A failed trade that quietly becomes an investment can trap your capital for months or years. A manageable loss can grow much larger. You may miss better opportunities because your money and attention are stuck in a position with no real plan.

A long-term investment that becomes a panic trade creates a different cost. You lock in the fear, miss the recovery, and start questioning whether you can trust your own research the next time the market falls.

You do not need perfect certainty before entering a position. But you do need a plan before fear arrives.

Because once the position becomes painful, your mind will start negotiating with rules that once seemed obvious.

The best time to decide what a position is supposed to be is before you enter, not after it turns red.

Before I buy anything, I must be able to answer four questions:

These questions sound simple. But they force honesty before fear and ego enter the conversation.

I also keep my long-term investments and trades in two separate brokerage accounts.

My long-term account is not touched because of daily price movements. My trading account has its own entries, exits, and risk rules. The separation makes it harder for me to lie to myself. A failed trade cannot quietly become a long-term hold when it is sitting in the wrong account.

You do not have to copy my exact setup. But you need some way to draw a clear line between the two games.

Rules cannot guarantee a good outcome. They can stop an emotional decision from disguising itself as a rational one.

Looking back at COVID, my mistake was not failing to predict the bottom. Nobody can do that consistently.

My mistake was allowing short-term fear to rewrite a long-term plan.

The real test of discipline does not come when the market is calm and following your rules feels easy. It comes when following them hurts.

And as always -

Patience builds wealth,
Bjorn

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