My Investing Mistakes and How Can You Learn From
I have been investing since 2010. Its 9 years to learn a lot of things from the investing process. I have learned a lot with the “Trial and Error” technique.
I have made a lot of mistakes which caused huge losses but the best thing was I had not stopped investing and now earned a lot from my Investment.
Always remember “Time is an investor’s closest friend”. Investment is most important in life and investment fight with inflation which is growing day by day with increasing rate and market is going more unpredictable.
So, if you’re young and want to start investment don’t be late learn from others mistake and follow some great investor techniques.
But I recommend you that you should invest when you got some skill and have good resources.
Let’s talk about my investing mistakes
1. Not investing soon
I have been earning part-time from 2006. Like other young adults, I spend all my money on movies, games, gadgets etc. I never think about my future burden and responsibilities like marriage life expenses, kids’ expenses, mortgages, and retirement etc. it was my first investing mistakes
Understand with an example:
If I could invest just Rs 1,000 per month while I had started earning, that 12,000 per year invested in a Mutual fund would be worth about Rs 3,22,000 today (Feb 2019) with 12% annual return.
Practically more mutual funds providing return upto 25% per annum. with a 25% return, the Rs 1000 small investment would have become 9.5 lakhs.
Please have a look at this SIP calculation which is calculated on normal 12% annual return.
2. Not knowing the basics (My Investing Mistakes)
Finally, when I wake up from a deep sleeping and began investing, I gave my money to a brokerage firm to invest for me.
Really, I had no knowledge about stocks or mutual funds. I just hear that share market gives the best return and I made a decision to invest my money.
This decision was only profitable for broker the made a lot of money with my money and I have lost my 40% money.
This was a big mistake trade executed by my broker charge a lot of money. Also, they invest in very expensive mutual funds.
So, before starting investment learn about the market.
3. Ignore to Invest in Financial Education
We must learn before we can earn. Every investment we make in ourselves will pay us dividends for a lifetime.
To do right Investing is both an art and a science. We should not ignore the complication of the process.
Investing is also a science because it requires a proper strategy for diversification, valuation, correlation, asset allocation, probability etc.
Our decisions are affected by our values, crowd psychology, moods, previous experience, greed, and fear.
“Education is a progressive discovery of our own ignorance.”– Will Durant
In investing, a little knowledge can be a dangerous thing, and a lot of knowledge can be profitable for a lifetime.
So, invest in your financial education. It will pay you dividends for a lifetime.
4.Chasing past performances
Slowly I have some knowledge about investment and switch to a discount broker, I have made another mistake. I have selected such mutual funds which had good past performance and star ratings.
I picked several loaded / high expenses-ratio funds. Historical returns are not exact indicators of future performance. Don’t plan your portfolio around it.
If you are expecting that last year’s top-performing funds or stocks to be successful in next year’s then you are wrong. Too many factors can affect stock, bond, and funds. Factors such as economic growth, interest rates, and political issues.
There’s no guarantee history will repeat itself, you should not ignore a past-season winner that has steady performance and a fund manager with a consistently solid track record.
5. Experimenting with my investment
Now I have some knowledge and experience of investment. I had known about investment options popular share and top performing mutual fund and bonds, but really it was not sufficient to earn from the market.
Now I have started shifting my investment in the search of great return from one share to another and one fund to another fund, it was a big mistake!
Always remember if earn profit you have to pay tax but when you got the loss you could not claim for a tax deduction.
6. Investing without a goal
In the earlier time of my investment I haven’t set a goal for my investment, I save money for investing in share market and mutual funds but never defined what to earn and how much to earn.
It was another of my investing mistakes.
If you want to get maximum return from your money then you have to set a goal and the goal should long term goal like kids’ education, building house, illness, and retirement.
7. Putting all your eggs in one basket:
It means keeping all investment in one investment plan. In the starting period, I focused only some popular share which belongs to a similar industry. it was not a good decision.
You should not invest in a single investment plan or a single industry.
Diversify your investment in may level
The first level is: you should invest in direct share market, mutual fund, bonds, RD, insurance, and gold etc.
Next level: if you decide to invest in the share market then diversify your money in many shares which belongs to different industries, different market cap and different in other criteria.
Next level: Your investment should be based on your future need, divide your investment in the short term and long-term investment.
8- Thinking short term
Investing for the short-term may not give your investments time to grow according to your goal. This is very important if you set a goal for long-term, like funding your retirement or kids’ education and making a dream home.
I have discussed in brief about my investing mistakes which I made in past. But now I am holding good stock and mutual fund in my portfolio, and I am also investing in some post office schemes for a fixed return.
So, Be the wise before investing in the market and don’t hesitate to expense in learning about investing.
Please check out my blog to know more about me: https://pricekhojo.com
About the author
Mrityunjay Srivastav commerce graduate from Allahabad University. Currently belonging to a teaching job. Blogging since 2015. Founder of Pricekhojo.com Read more