I’ve been investing for 6 months now.
In the beginning, I made all the most pointless mistakes one can make:
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“Uh, Nokia is definitely going up!” and soon I was deep in the red.
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I bought small batches of shares. Naturally, the fees ate into the profits even from good stocks.
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Too little anticipation of whether I would get a return on my investment in the near future, or if it would be smarter to wait and buy something that had some potential for profit.
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I also joined the Finnish Shareholders’ Federation (Osakesäästäjien liitto) too late. I would have saved a lot on fees if I had looked into that right away.
Finding this forum was quite a change for my adventure. Firstly, through this, I found companies that I probably wouldn’t have heard of otherwise until their valuation was already at its peak. Learning from my initial mistakes, my strategy has been as follows:
- Diversify
- Buy larger batches of shares
- Research and consider what you benefit from with that specific purchase vs. another stock that interests you. (Of course, it doesn’t always hit, and the percentages would be much better if Smartti had been snapped up earlier and some hype stock bought instead of Shell).
- Listen to wiser people.
- Take controlled risks (WSB, where I doubled my stake and another play is ongoing with Sundial)
- Also consider dividend yields, not just growth.
- Actively follow what’s happening and look for new opportunities.
- Get rid of the stupid rule that I only buy with x amount per month, if/when a good stock comes along.
The worst part is that there would be opportunities, but the capital is currently tied up in stocks and there haven’t been any selling opportunities. I set a limit for myself on how much cash I keep in my checking account for living expenses and sudden costs, and I stick to that. Of course, my next paycheck will leave some savings, and then I’ll have to see what I want.
So, I really try to diversify my purchases into growth companies, penny stocks (if I see some potential in the company), and dividend-paying stocks. I want to understand at least preliminarily the company’s market and its potential. I certainly don’t understand everything, and you can’t know competitors and risks in every sector. But the idea must feel good initially, and after that, I research whether it makes some sense to sink money into that particular company.
Currently, I don’t have too many misses. The worst are Smartti, which I managed to buy when its valuation was at its peak, and that damn Nokia, which I didn’t even want to give up during the WSB frenzy when it was temporarily even a euro or two in profit.
Next, I need to develop my mind regarding the timing of sales (don’t get greedy) and try to get rid of FOMO.