MISTAKES & LEARNINGS OF MINE FROM 8 MONTHS OF INVESTING JOURNEY

You may have an idea what is going to happen in today’s article, I started my investing journey around 8 months ago, in July 2021, now I can realize how fast the time is changing, sometimes I think I just started & it has already been more than 8 months. Along the journey, I have done a couple of mistakes & learned a lot of things. Through this period of investing, I have understood learning never ends, the more we learn, we get to know there is a lot still left to learn, so I think we should make it a part of our life instead of the mindset that first, we should learn and then we will just be happy, no more information needed, we should make a balance in everything.

So, here are some of the mistakes that I have been making since I started and the things I have learned over time:  

                                

 1] 

MISTAKE:  When I had just started investing, the first funniest thing that happened to me, as I started with an IT ETF and I was thinking I am investing in an index fund, in that ETF had 10 IT stocks, was quite good, and I got to know about that around 3 weeks later when I was discussing investing with one of my school friends and realized where I am investing in, that was an ETF, not a passively managed index fund. I didn’t invest so much, it was around a few hundred rupees, and I stopped putting money in that, it went up significantly for a month, I saw that and thought to start investing money in that ETF again, but since I started putting money in that, it started moving slow, but the thing is that we should be aware of the things we do, if we don’t know what we are doing but keep doing, simply it doesn’t make sense. As Warren Buffett says “Risk comes from not knowing what you are doing”.

In FEB, 2022 I sold that ETF with a decent profit because for almost 4 months it wasn’t performing well and went down, but in March it went up heavily, although, I sold out this ETF because I needed some money at that point, I think I shouldn’t have sold out that ETF, probably I was more influenced by seeing falls in the market.

 

LEARNING:  Although I withdrew because I wanted to invest in another place and that was my mistake, in order to withdraw and reinvest it in another place, I had to pay some taxes, and in the field of the stock market we can’t ignore taxes easily, it’s quite heavy, and after all, I wasn’t able to generate better profits, I wasn’t able to control my emotions and it just happened, and I learned that how important it is to manage our emotions.

2]  

MISTAKE:  The second mistake I did was I used to think I had understood the majority of the part of investing after researching about investing for 3-4 months, I used to think that I was getting almost the same kind of information while watching some videos or reading an article, means nothing was left to learn! I had this kind of mindset that I had done enough research.  

 

LEARNING:  But when I got into the field, personally I stuck at almost every step, first I did my pan card, then opened my Demat a\c with Groww, although it wasn’t hard at all, everything becomes very easy these days but the thing I was telling you is that after starting my journey I became a serious learner because I was getting tons of questions related to that and I had to find out the answers of those doubts. And I strongly believe in a formula that we can’t be focused on anything with 100% of our effort until we are going through that situation, when we start experiencing the thing, we get an urgency to do more research on that.

3]

MISTAKE:  The third mistake I did, for a short period of time I became a trader, never wanted to do that anyway, but I just caught the flow, basically what happened, I live in a PG, so there was a guy who was doing trading, not exactly trading but used to invest in high volatile stocks, some were penny stocks, hardly we know about the company and when we used to meet together, so most of the time he used to tell us that today he is making 300-400 rupees as profit, and I was making 30-40 rupees( because I had been investing in mutual funds) even when we had almost the same amount of capital, someday if the market went up so he could have made more than thousand rupees, so I was influenced by him. So, I made a plan that I would continue my sips of mutual funds but along with that, I would also start investing in some stocks, very volatile stocks. If we invest in some good stocks, so there isn’t anything bad but investing in penny stocks or in stock because somebody has recommended you, that isn’t the good thing, because we do the hard stuff to make money, we shouldn’t play gambling with it.

 

LEARNING:  I am not blaming the person who inspired me, because ultimately, I had the greed to generate bigger returns, I started following some ytb channels where I was getting instructions from. At the starting point, I was also generating a few hundred rupees every day and I realized trading can be an option for the person who can devote their full time & energy, but ultimately it wasn’t for mine. I was definitely making some profits but for that reason, I had to be in a hurry always, I had to enter in the application for more than 50 times in a day, I wasn’t able to focus on my own stuff, I realized I never wanted, investing in my life that way, for the first 7-10 days I was able to make some profits and after that, it started going down, because those were penny stocks, so those stocks wouldn’t have any future, I lost all my profits, even I went in loss, I was heavily distracted, didn’t know what was happening, getting short tampered, then I decided to sell all the unknown, penny stocks from my portfolio, and I sold in a loss because my presence of mind is more important than few hundred rupees. I always see investing as my passive income, I don’t want to indulge in that so much but want to learn even the silliest thing about investing definitely. I have entered in that and gotten substantial results, I wouldn’t ever suggest to anybody to do trade, but if anybody wants to then can try.

4]

MISTAKE:  The fourth mistake I did, was I didn’t have as much patience as I do now comparatively I think because I was lacking patience, that’s why I took so many wrong decisions if I have to remember some of those, so, for example, I sold my ETF & few good stocks because it was going through some bad time-zone, although I never try to time the market, when the market was doing well constantly, I thought it would continue its growth so, I used to invest more into those funds, & then it started going down because it was already in its pick. I did that a couple of times till now, and for that reason, my average of the last 6 months was in a negative zone till the 15^th of march. Though, it is doing well now.

 

LEARNING:  I can proudly say that I might haven’t generated a decent profit from the stock market, I didn’t take opportunities but I have learned to manage my emotions, fear of losing capital, angriness on my own decisions, I had FOMO a lot, but now it doesn’t affect so much, I know there is a lot left where still I have work on but ultimately, these days markets ups & down doesn’t affect me so much, I am comfortably seeing these things, before, in the starting time I used to get panic when the market went down heavily, but now it’s okay. It teaches me that we are just in a bad time period, it has to go up again, if you are invested with some good stock then forget about these small falls in the market. There is a code that says “if you have done the job right and bought a stock only after careful study, then you should be a reluctant seller”.

SOME MORE MISTAKES THAT PEOPLE USUALLY MAKE:

1] They sometimes try to time the market, but it doesn't work out always, you might be waiting for some dip in the market but it is growing and growing, no one can time the market even fund managers are also not able to predict what will happen next after giving their whole time into that, so don't try to time the market, invest consistently for the long period of time, you might be worried about some falls of the market but ultimately, if you keep invested for a long period of time then you will get an average of all. 

2] Sometimes, investors get attached with the stock they have invested in when the stock does well in the market, they think they have taken the right decision and they allow their emotions to play and forget that they bought that stock as an investment and for that reason sometimes they end up losing money, so we should keep in mind that we should not get attached with our investments. 

3] Sometimes, we as an investor set unrealistic expectations, for that reason we take the wrong decisions, invest in highly volatile stocks instead of blue-chip stocks, in that way we take risks beyond our capacity. that shouldn't be the right approach to look at the market. we should have a genuine expectation, for example, if we would invest in an index fund for a long period of time then we can expect 12-13 %, if we would invest in stocks directly so, here chances of getting bigger returns is quite higher because here the risk is quite higher compared to the index funds & ETF's.

4] Not diversifying our portfolio, can be one of our biggest mistakes while investing for the long term because we are investing in our Indian economy, so, the kind of company we choose might not be able to generate expected returns but if we have a basket where a couple of stocks are there, so, in the long run, there will be some stocks that would break all the expectations of ours and can generate a great return for us. 

 5] If we are just starting out then it is said that we should always start with small capital, because in the process we may do some mistakes, so it would be better to start with small.

6] As a beginner if we don't know about the market so much, so we can start with an index fund because here you get a basket of stocks so, the risk is automatically getting lesser. 

Do you want to know more about the index fund, check this out: sujanghoshzz.blogspot.com/2021/07/what-is-mutual-fund.html

7] If we want to invest in equity, we should start with blue-chip stocks, which means they already have a good image in the market, they have been generating good returns for their investors, they aren't so volitile, and basically, we should have the basic knowledge about the company we are about to invest in,...

if you want to know more about the stock market then check this out: sujanghoshzz.blogspot.com/2021/07 ( what is the stock market)

If I have to say something then people have to learn to manage money, it is called financial literacy, we do well in school & college, then, may have plans to spend our life by doing jobs or businesses, but ultimately, we should have this one skill otherwise we would have to go through some difficult issues related to money. Whenever I get to know some interesting fact about money then think, people usually don’t know about that, and there are some people out there who are constantly trying to share their ideas, knowledge with as many people as possible through social media, books, podcasts, etc. I would just say that we do everything, wouldn’t it be better if one of these things becomes a part of our journey! Because these things would have a massive impact on our life. And we should start investing at an early age because we do some mistakes when we start something & that is very normal, so my point here is if we do learn to manage a small amount of money then in the future, we will be able to manage the big amount. 

Want to know some more places as like the stock market so you can invest your money then check out this article:

 sujanghoshzz.blogspot.com/2021/10/what-are-ways-you-can-invest-money in .......

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