I entered the market in August 2018, we were in Bear Market till Elections.
I’ve made plenty of mistakes, many out of ignorance and some out of emotional frenzy. A major lesson from markets is that if you’re living a good/happy/woke life, the odds of you messing up psychologically reduces drastically which is the key to sustained wealth.
In my first year, I was dabbling with stocks and would swing trade and was largely clueless about the broader market activity. I would use Money Control to go through stocks, read some news, make my picks and the rest was jai mata di.
Soon, my portfolio had many bagholders usually the cheap PSU stocks and other cheap stocks like Jain Irrigation, South Indian Bank. etc.
I dumped most of them during 2019 post election rally, but felt left out of the bull run that lay ahead.
I learned to ignore Financial Television and stock forecasters soon.
Upon checking my P&L calculation I realized that I was losing more money than i was making and learned about DP charges.
Then COVID19 came and wiped out my portfolio, 25% down. Now what? I started using reddit investment forums like r/IndiaInvestments and r/IndianStreetBets. It helped me learn quite a bit about markets and business. Still there were so many gaps in my knowledge and I learned each of them by putting my skin in the game.
Post COVID19 the stocks the cheap, but Gay bears in Reddit created an atmosphere of panic and started throwing predictions of NIFTY 6000 and like any supposed clever investor I waited, waited, waited… and NIFTY went to 10k.
I started buying here and there, though was afraid to commit too much of my capital. My Portfolio was a zoo with 30+ stocks.
I started selling them the moment I started seeing greener days. It was a huge mistake. I would make profits of 200-300 bucks missing out on 1000-1500 buck profit had I held them a month longer.
I learned that it was called Disposition Fallacy. Never sell your winners, not too soon.
And then I joined ValuePickr. I love the atmosphere here, but I must caution newbies you could get waylaid even here too if you’re not value conscious.
If you don’t know why you are holding a stock, if you don’t have a story, build it first. Don’t watch too much news or don’t read too much on ValuePickr. There are many threads where even for supposedly good companies we have posters who have created heavily skeptical environment by overemphasizing negatives of certain companies that the reader’s conviction could break.
I once held such a Stock, but was not quite sure of its value. The FUD created by ValuePickr threads did not give me peace of sleep at night and I sold that stock for meagre profits. Soon that stock would rally about 60%. It was Caplin Labs.
So as y’all can see I’m light years from being perfect but really perfection isn’t about what you do its mostly what you don’t do. Hold on to your picks rather than trading them away. Know the worth of what you’re holding, don’t be swayed by detractors and news (exceptions exist).
Edit : I forgot to mention about my MF Portolio. In my first year, I had diversified across 7 MFs, 4 equity funds and 3 debt funds. Now I just hold 1 index Fund. its funny how financial analysts fool the gullible to diversify even in MF. MFs are already diversified, don’t diworsify by buying too many plans.
Thanks.