When someone is down 50% or more in a stock, they’ll often take to social media to complain and casually ask “what should I do next”? No one wants to sell for a loss, people almost act like it’s admitting failure. And people’s perceptions are often colored by the price at which they bought the stock. “Oh I bought 10 shares at 100$ and now they’re each worth 50$, when can I expect to break even again?” I can’t predict the market but I can say one thing: the price you paid for the stock DOES NOT MATTER. It doesn’t matter if you’re up or down, you should look at any stock you own and as yourself “do I think this stock will perform as well or better than the market in the near future?” A lot of people get stuck in a mental narrative, they start to think trends will either continue indefinitely or definitely reverse soon, depending on what would make them feel better. But a stock that is way down could still be overvalued just like a stock that is way up. A few months ago Carvana ($CVNA) stock was down 50% year to date. What did it do after that? It dropped another 50%, and another 50% from there, and just for good measure another 50% from there. Dropping 50% 4 times in a row meant it had lost about 94% of its starting value from January 1st. And Carvana still had a ways to go as it’s currently down 98%. If you had bought $CVNA on January 1st, then by April 1st you would have seen it lose 50% of it’s value. Your friend may have been tempted to think “it can’t go much lower, can it?” and bought the dip while you held your shares. You would then see your shares go on to lose 98% of their value while your friend’s shares lost 97% of their value. Your friend lost relatively less than you did, but still lost nearly everything.

Your cost basis on a stock is only relevant for tax purposes, it should have no bearing on your investment decisions. The only thing you should care about is the current price and the expected future price.