My Biggest Investing Lessons Learnt To Date

Like most people, the month of January is the time to set big goals for the year such as personal goals, professional goals, and financial goals. My#1 financial goal in 2021 is to Invest More and to achieve a more diversified portfolio. 

Truth be told, I have made some successful investments in the past and also some Rookie mistakes, which I will be sharing with you in today’s post. To put things in context, the figures below show the performance of my investment portfolio (not mentioning any specific names) which I have built over the years. NOTE: Most of these investments are in the UK stock market.

Rookie Mistakes To Avoid While Investing

1). Start With Stock Mutual Funds (such as Index Funds) 

If I have to start investing all over again I would do it differently. Rather than buy individual shares of companies, I would begin investing with stocks/shares Mutual funds, like index funds. 

Why? Investing in Index funds means you buy all shares within an index. You stand to enjoy low fees and cost and get exposure to a range of stocks, rather than individual shares. Index funds will not make huge gains but will definitely not experience large risks such as when you go for individual stocks/shares. 

Another thing to note is that with index funds you won’t get rich off quickly. They are good vehicles for long term growth over the course of your working life to ensure you have a safety nest egg in the future.

2). Invest In The Right Knowledge

I could have understood ‘bank-shares’ fundamentals much better. An example of what I’ve learnt is that banks tend to underperform when interest rates are low and when the economy is weak (like a recession). The stock market is volatile and as an investor, you need to know what you are doing and invest in the right knowledge to enable you to be successful in investing.

Don’t jump on the bandwagon because everyone is investing in a particular stock. Don’t invest if you don’t fully understand the business or the value proposition of the company. The mistake I made was to invest in some tech stocks during the year 2000 dot com era. 

3). Monitor your portfolio 

Truth be told, “You need to keep an eye on your investment portfolio”. One thing I could have done earlier in this regard was to sell the bank stocks in my portfolio. You have to keep an eye on your financial independence.” Be sure to track your investments, and there are easy ways to do that. You can use custom spreadsheets like Google Sheets and Microsoft Excel or softwares like Quickbooks and pay attention to the fund managers performance.

In Conclusion… 

Investing is not complicated if you know what you are doing, and follow some simple and specific rules. I will be sharing these simple rules for beginning investors in a future post. Kindly enter your name and email so you will be the first to know when they are published on this website. 

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