22 Investing lessons in 2022
1. Everyone has a plan until they get punched in the face. You might have a grand strategy that worked so well in the past 2 years. This year you get punched. Don't give up. Learn and be better. Don't waste the lesson.
2. Your portfolio value can go down, but your sanity shouldn't. Your health can enable you to make money but money can't buy you a pink of health.
3. Don't compare returns with others. It breeds unhealthy competition, envy and ego. Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.
4. Don't laugh at others, no matter how much money they have lost. No one can stay at the top all the time and you don't want others to laugh at you when you are down.
5. There are many different ways to invest. The other investor who invests differently from you isn't wrong. It is your ego acting up. Tolerate different investment views just like how you tolerate race and religion differences.
6. Don't argue with other investors online. They bring you down to their levels and beat you with experience. The feeling sucks and you waste your time.
7. Sometimes a person who is seemingly trustworthy can be a fraud. Ask SBF. But it isn't helpful to doubt everyone. It is better to trust but verify.
8. There are a lot of scams online and are getting sophisticated. Take extra care when making transactions online. I will never ask you to invest with me on Telegram.
9. Everyone knows stocks offer great discounts during a crash. But most people are too fearful to take advantage of it, always thinking that it can get worse. An investor need to be a long-term optimist.
10. Stock tips can work sometimes but they don't work in the long run. Because you didn't do the work and you don't understand what you are investing in. When the stocks don't do well, do you buy more, hold or sell? Totally clueless and no confidence at all.
11. Going all-in into one investment and making a fortune is sexy. We might hear a handful of success stories but we rarely hear the stories of those who lost big. The probability is higher for the latter.
12. Buffett said not to have too many stocks but he also advocated the well-diversified index fund. Concentrate your stocks if you know what you are doing. Else, diversify. More importantly, be honest with yourself which camp you are in.
13. Everything moves in cycles - interest rate, inflation, economic growth, growth stocks, value stocks etc. Good times don't last forever. So are bad times.
14. Tech disruption was all the rage two years ago. These stocks were helped by cheap money. They got disrupted by rate hikes this year. Interest rate matters more than technology in this case.
15. Oil price went below zero in 2020. But Oil and gas stocks top the charts in 2022. Remember the stock market is a wheel of fortune. It turns.
16. The world is driven by envy and not by greed. When your peers are making money in the markets, you want to jump in so as not to lose out. Usually that's the sign of an end to the bull run. Go read about Rene Girard's mimesis.
17. Bonds may not be safe all the time. The sudden spike of interest rate caused bond prices to dive. Interest rate really matters.
18. Stock-bond portfolio may not provide the diversification benefits once in many decades and 2022 was one of those times. Investors nearing their retirement must strategize better to avoid such events because they don't have enough time to recover from a huge loss. Ask your advisor how.
19. Interest rate affects currencies too. The rate hikes in the U.S. have caused USD to strengthen against many other currencies.
20. Investors tend to move to safer assets after the market crashes. This is their fear speaking - they want to avoid the pain of seeing the losses. If you want to trade the markets, move in and out accordingly. But if you want to invest long-term, you have to do it even during the worst of times. Decide and don't change course to suit your emotions.
21. If you have been very conservative and keeping your capital in quasi-cash, you can now enjoy higher bank interests and bond yields. It makes sense to do a bit work to move your money to extract the best yields in the markets.
22. No one knows exactly how the markets will move in 2023. Predictions may make you feel like you are gaining some certainty, but they are usually inaccurate. It is better to have clarity via your investment strategies.
2. Your portfolio value can go down, but your sanity shouldn't. Your health can enable you to make money but money can't buy you a pink of health.
3. Don't compare returns with others. It breeds unhealthy competition, envy and ego. Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.
4. Don't laugh at others, no matter how much money they have lost. No one can stay at the top all the time and you don't want others to laugh at you when you are down.
5. There are many different ways to invest. The other investor who invests differently from you isn't wrong. It is your ego acting up. Tolerate different investment views just like how you tolerate race and religion differences.
6. Don't argue with other investors online. They bring you down to their levels and beat you with experience. The feeling sucks and you waste your time.
7. Sometimes a person who is seemingly trustworthy can be a fraud. Ask SBF. But it isn't helpful to doubt everyone. It is better to trust but verify.
8. There are a lot of scams online and are getting sophisticated. Take extra care when making transactions online. I will never ask you to invest with me on Telegram.
9. Everyone knows stocks offer great discounts during a crash. But most people are too fearful to take advantage of it, always thinking that it can get worse. An investor need to be a long-term optimist.
10. Stock tips can work sometimes but they don't work in the long run. Because you didn't do the work and you don't understand what you are investing in. When the stocks don't do well, do you buy more, hold or sell? Totally clueless and no confidence at all.
11. Going all-in into one investment and making a fortune is sexy. We might hear a handful of success stories but we rarely hear the stories of those who lost big. The probability is higher for the latter.
12. Buffett said not to have too many stocks but he also advocated the well-diversified index fund. Concentrate your stocks if you know what you are doing. Else, diversify. More importantly, be honest with yourself which camp you are in.
13. Everything moves in cycles - interest rate, inflation, economic growth, growth stocks, value stocks etc. Good times don't last forever. So are bad times.
14. Tech disruption was all the rage two years ago. These stocks were helped by cheap money. They got disrupted by rate hikes this year. Interest rate matters more than technology in this case.
15. Oil price went below zero in 2020. But Oil and gas stocks top the charts in 2022. Remember the stock market is a wheel of fortune. It turns.
16. The world is driven by envy and not by greed. When your peers are making money in the markets, you want to jump in so as not to lose out. Usually that's the sign of an end to the bull run. Go read about Rene Girard's mimesis.
17. Bonds may not be safe all the time. The sudden spike of interest rate caused bond prices to dive. Interest rate really matters.
18. Stock-bond portfolio may not provide the diversification benefits once in many decades and 2022 was one of those times. Investors nearing their retirement must strategize better to avoid such events because they don't have enough time to recover from a huge loss. Ask your advisor how.
19. Interest rate affects currencies too. The rate hikes in the U.S. have caused USD to strengthen against many other currencies.
20. Investors tend to move to safer assets after the market crashes. This is their fear speaking - they want to avoid the pain of seeing the losses. If you want to trade the markets, move in and out accordingly. But if you want to invest long-term, you have to do it even during the worst of times. Decide and don't change course to suit your emotions.
21. If you have been very conservative and keeping your capital in quasi-cash, you can now enjoy higher bank interests and bond yields. It makes sense to do a bit work to move your money to extract the best yields in the markets.
22. No one knows exactly how the markets will move in 2023. Predictions may make you feel like you are gaining some certainty, but they are usually inaccurate. It is better to have clarity via your investment strategies.
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BAO BMW : well Said..
昇禄 : Thanks for the advice !
minions365 : I am quite down and broke. Always go the wrong direction but yeah learn to cut loses is important.
Ixy The Cat : Many good points that ring true
Passive Investor : lj .talk bs .cock Huawei.. don't listen to this bugger