I’m a kinesthetic learner, which means I have this insatiable energy to learn things by doing things. Which means I don’t have the patience to watch videos or listen to someone explain something when I want something right away. Which means I usually do the thing before I should and make some stupid mistakes.
Well, we have more advisors talking about what they did right vs. what they did wrong. But it’s the mistakes that lead you to the tips you wouldn’t investigate unless you had to get yourself out of trouble. So at the risk of embarrassing myself, let’s save you some time and headache with the list of mistakes I made so you wouldn’t have to 😊.
Luckily, my portfolio’s been outperforming the Dow Jones Industrial Average for at least the last month (I’m the green line below).
But when you’re dealing with rapid ups and downs and uncertainty of what’s going to happen next, it’s critical to make every dollar invested count in your favor.
It’s never a bad time to invest during a recession, if you have the means to do it. I got a little too eager, though, and missed some rare chances to make enormously more than I’d invest…and then I overcorrected and put myself in an unnecessary hole that left me doubting my ability to keep the momentum.
Here are ways that happened, and how I’m getting back on track regardless:
- I didn’t explore all my options with options.
Options contracts offer you the opportunity to buy or sell minimum shares of a stock at a specific price (relatively cheaper than buying stock through a direct purchase).
Options are like coupons you have to pay back for playing a slot machine. No matter how much of a certain data you have on company stock, there’s never a guarantee that everything lines up the way you think it will when the reel stops spinning.
I bet on an option for a company (see below) only after I had solid evidence of something that would make its profitability skyrocket in the near future. I even waited to watch the stock price move either up or down after a major news announcement to make sure I had more than a hunch about its potential.
What I did:
I made the most rookie mistake ever because I was too lazy to do my research. I paid no attention to pretty bad penalties for holding an option that expires worthless…
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