When investor's talk about mistakes it is often in relation to the "worst" investment mistake they ever made. I am going to turn this around today and talk about the "best" investment mistake I ever made.
This example is the "best" mistake because I learned a number of lessons from it. In fact, when I think of many of my investment mistakes I believe that I have learned more from them than I have from the investment moves that have done well. Sounds like that common axiom: “All men make mistakes, but only wise men learn from their mistakes” - Sir Winston Churchill.
The mistake in question is the purchase I made of a stock a long time ago. It was a forestry stock that I heard an investment "expert" talking about on the radio as I was driving my car. Getting very excited about this stock as I listened to him talk, I knew I had to act fast or I would miss the opportunity to make scads of money. I probably don't need to tell you how this one worked out, but I lost money. It was only about $1000, but at the time it was a lot of money for me and it felt awful.
However, as I look back on it I realize that I learned more from this mistake than I have learned from many of my subsequent mistakes. Here are the three primary things I learned from this awesome mistake:
1. Never act on a stock tip
2. Never buy anything without thorough research
3. Never buy anything based on emotion, no matter how much your heart is racing
These lessons have stood the test of time for me and I have never made the same mistake again (I have made others of course - but that is the topic of another post). I challenge you to think of what your best investment mistake is and what you learned from it. Let us know using the comment section below.
This article was written by The Dividend Guy. You may email questions or comments to me at info@thedividendguyblog.com.
2 days ago
