Previously @le_bib did a series on his biggest investment mistakes and just recently @nettspend posted about his, so I wanted to make my own post about my biggest investing mistakes as a 22 year old investor: 1. Constantly Buying/Selling When I first started to learn about investing and taking it seriously, I continued to buy and sell positions constantly, multiple times a week usually. I'd rotate through all kinds of companies from $NVDA to $CNR to $VFV or $XEQT. I would find new companies or new funds, buy them, then sell them just a few weeks later. I did this constantly and it really ruined my returns. 2. Chasing Yield This one may surprise you but for a little bit there I owned a few funds like $CONY$MSTY or $HDIF. This was before I understood anything about how yield actually works, total return, CC funds, etc. I bought them with the intention of getting a somewhat "big" paycheque as I wanted to see if it was really legit (spoiler alert, it's not). Chasing yield without understanding the mechanics of options, CCs, total return, and fees will absolutely kill your portfolio in a bear market. 3. Chasing Hype/FOMO Like anyone else I really got sucked into FOMO. I'd buy things that I saw show up and whatever stocks are popular. I'd be in $PLTR one week from someone's post, and the next week I'd be in $NVDA. If you FOMO into hype investments then you'll only set yourself up for failure. I chased whatever was popular and there was absolutely no care about risk or understanding. I'd buy a business without looking past the graph. 4. Thinking I Can Time Things Perfectly Spoiler alert, I can't. There were times I thought I was a genius and could just buy in at the right time and make loads of money. My absolute biggest opponent in this case was $SEZL. Without fully understanding the business, I've bought in and out a few times from this company and it's only been bad. After seeing over a 1000% return, I thought I was a genius and bought in hoping for more. My position then went -50% and I sold out. The company proceeded to go another 2-3x past what I bought at, so before another earnings I bought in again months later. Right after earnings I lost over 30% again and I sold out again. I was no genius, and you cannot time anything perfectly. 5. Not Understanding Risk At first for a while I did not understand the concept of risk. I didn't understand how risky some positions were and how much risk I was actually taking on. My portfolio was filled with companies that could easily go down 20 to 50% in a week and I didn't even know. Thankfully I never learnt the hard way, but I needed to learn that every investment carries risk, and some are much greater than others. 6. Got Attached To Stocks Like many people I fell into the trap of getting attached to investments. You find a business or fund you REALLY like and all of a sudden it becomes your favourite. The problem is when you get attached to it and ignore all fundamentals. It didn't matter if the company did poorly, because I had a false idea in my head I just continued to hold on. I needed to learn when it was time to take your losses. 7. Not Doing Research This one was a big one, many of my early investments involved essentially 0 research and understanding. I didn't care to do the work to dive deep into fundamentals or even look at a fund's page. I just bought what seemed good and if the graph was green I'd load it up. This is a complete failure of my past self and it's something most investors do. If you can't explain your investment simply and clearly to someone in a few minutes you don't understand it at all. 8. Way Too Many Holdings At one point my portfolio consisted of 40-50+ holdings in it. That is not a good idea, and I fell into the trap of "diworsification". No matter what kind of investment strategy you hold, nobody needs to have 40-50+ different investments in their portfolio. I had a mix of all kinds of stocks and funds, none of which worked together at all. I'd have some covered call fund mixed with tech stocks mixed with utilities mixed with retail mixed with index funds, all of which just made my overall returns worse. You absolutely cannot keep up with that many holdings, and if you have that many I'd encourage you to start cutting some things back 9. Making Assumptions This is a big one, but it's so easy to start making assumptions that you cannot predict accurately. Like in my section about $SEZL I just assumed I would be alright and earnings would go well, it did not. It didn't matter that the past 10 earnings were a beat, it doesn't make the 11th a guarantee. I also assumed I knew everything there was to know about certain investments or I assumed that I wouldn't lose money and just make more in every market. These all cost me time and money and helped me realize it doesn't matter how "guaranteed" something is, it never really will be. 10. Taking Other's Opinions It's fantastic to hear everyone's opinions and thoughts on various topics, but you absolutely cannot be influenced so easily by what they say. At the beginning of my journey when I was buying so many investments I would constantly see people post about them and I would take it to heart immediately. If I bought a stock and someone posted how it was going to crash, I'd basically sell the next week. If someone was raving about their favourite fund or company, I'd buy a bunch more. All it took was 1 or 2 posts and I was convinced of something. That doesn't sound very helpful, does it? If I want to be a good investor, I need to be so strong in my thesis and strategy that it takes a lot more than 1 post by a random nobody online to influence me. That was 10 of my biggest investing mistakes in my career, there are many more so feel free to ask anything in the comments you'd like to know. If you're following some investors right now and they refuse to show losses or admit their mistakes, you might wanna re-evaluate if you can trust their information. A good investor will grow from their failures and use them as a learning experience. We ALL make mistakes, it's guaranteed so make sure you're honest about them. As always, do your research and happy investing!
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45 Comments
Moe @moementumfinance Ā· 3mo
Thanks for sharing @ronan. Really insightful. I have definitely made many of these same mistakes (more than I'd like to admit lol ... I see you #1, #3, #4, #5, #7, #8, #10 š¤¦āāļø)
Growth Compound@eli_leo_jass Ā· 3mo
I appreciate the honesty and the sharingā¦ I guess I can mirror everything you just wrote almost in the same order. This platform is exactly the place to share with others and, while I believe people will still Ā«Ā tryĀ Ā» the same things, if they read this it may help them with going overboard on those aspects and help them think: š¤Ā Ā«Ā humm maybe I should be carefulā¦Ā Ā» Have a great weekend!
Juliet @jullyspikes Ā· 3mo
Iāve learnt a lot from this post
Moe @moe_on_margin Ā· 3mo
Ohhhh man this one hit hardā¦ made all same 10 mistakes too š But, you know I think thatās the best way to learnā¦ no amount of money can get you that real world education and youāll always Carry those lessonsā¦ going back wouldnāt change a thingā¦ every one of those mistakes made us who we are ā¤ļøā¤ļø āItās a shallow life that doesnāt give a person a few scars.ā
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