Biggest Investment Mistake

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sapper1371
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Re: Biggest Investment Mistake

Post by sapper1371 » Fri Jan 11, 2019 3:43 pm

Investing in 529s before I was maxing out all tax advantaged space. Have plenty of money now for 529s but can’t get that tax advantaged space back now.

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 3:46 pm

cpan00b wrote:
Fri Jan 11, 2019 2:29 pm
Not investing into my 401k or in funds in general until I turned 28, despite working full time from 21.

Day trading individual company stocks - lost about $30K which turned me off from the market for those 7 years, which also coincidentally happened to be a very strong bull market I missed out on.
Never trading individual stocks again unless it's just for fun (play money).

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 3:48 pm

sapper1371 wrote:
Fri Jan 11, 2019 3:43 pm
Investing in 529s before I was maxing out all tax advantaged space. Have plenty of money now for 529s but can’t get that tax advantaged space back now.
+1 this!

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CABob
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Re: Biggest Investment Mistake

Post by CABob » Fri Jan 11, 2019 3:58 pm

I'm sure there were a number of mistakes in my early working/accumulating years, but for the most of them I now consider it tuition on my investing education.
My biggest mistake has to do with Roth IRAs. They came along late in my accumulating years and I thought I didn't have enough investing years ahead of me to make them worthwhile. Now that it is 20+ years later I am aware of what their advantages are. Secondly, there was a period of time after retirement, after age 65, but before RMD that I had very low income and paid no income tax. I should have taken advantage of that situation by doing a back door Roth and/or selling some high unrealized gain investments when it could have been done with little or no tax impact.
Bob

WhiteMaxima
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Re: Biggest Investment Mistake

Post by WhiteMaxima » Fri Jan 11, 2019 4:11 pm

saving too much, living poor life and dying rich.

RobLyons
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Re: Biggest Investment Mistake

Post by RobLyons » Fri Jan 11, 2019 4:16 pm

1. Not riding out 2008 longer. Horrible timing.

2. Selling my 20% discounted employee shares of Home Depot stock at about $25/share

3. Then borrowing from 401k to purchase home



Live and learn? :oops:
"Great parenting sets the foundation for a better world"

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Tycoon
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Re: Biggest Investment Mistake

Post by Tycoon » Fri Jan 11, 2019 4:29 pm

WhiteMaxima wrote:
Fri Jan 11, 2019 4:11 pm
saving too much, living poor life and dying rich.
You're dead?
Be still, sad heart! and cease repining; | Behind the clouds is the sun still shining; | Thy fate is the common fate of all, | Into each life some rain must fall, | Some days must be dark and dreary. | Longfellow

OldSport
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Re: Biggest Investment Mistake

Post by OldSport » Fri Jan 11, 2019 4:32 pm

I had no concept of saving for 'retirement' when I was younger. I didn't even know about Roth IRA and Roth IRA contributions until I was 27. I missed out on many years of Roth contribution space when I was a low income student in the lowest tax bracket.

When I started working, I only saved the minimum in 401k (6%) to maximize company match. I saved very little outside 401k (maybe another 5% after tax) when I started working and only invested in VG Prime MM. PrimeCap and Capital Opportunities were still open to new investors back then!!

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 4:46 pm

Tycoon wrote:
Fri Jan 11, 2019 4:29 pm
WhiteMaxima wrote:
Fri Jan 11, 2019 4:11 pm
saving too much, living poor life and dying rich.
You're dead?
I've never heard anyone say they saved too much but I guess it's possible!

Tdubs
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Re: Biggest Investment Mistake

Post by Tdubs » Fri Jan 11, 2019 5:20 pm

1990s: Sold Apple somewhere in mid-1990s.
2000s: Did not study investing enough.
2010s: Did not open HSA soon enough or max tax advantaged accouts till last year. (That's two "biggest" mistakes this decade, but just proof that I'm getting dumber)

DesertDiva
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Re: Biggest Investment Mistake

Post by DesertDiva » Fri Jan 11, 2019 5:32 pm

Trying to pick individual stocks. :oops:
♫ Stocks go up ♫ Stocks go down ♫ Stocks go up ♫ Stocks go down ♫

Soundwall
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Re: Biggest Investment Mistake

Post by Soundwall » Fri Jan 11, 2019 6:14 pm

Fear and darkness lead me to buying a IUL policy thinking it was the only way to invest and not lose money. :oops:

Good Listener
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Re: Biggest Investment Mistake

Post by Good Listener » Fri Jan 11, 2019 6:22 pm

The second marriage. :oops:

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 7:43 pm

Soundwall wrote:
Fri Jan 11, 2019 6:14 pm
Fear and darkness lead me to buying a IUL policy thinking it was the only way to invest and not lose money. :oops:
We've all been there...

roscoe88
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Re: Biggest Investment Mistake

Post by roscoe88 » Fri Jan 11, 2019 8:20 pm

renue74 wrote:
Fri Jan 11, 2019 9:32 am
Waiting until my 30s to really start "understanding" investing. Can't get those years back.
Same here, lost the best 8 years of my investing life. My portfolio would probably be twice as big at retirement had I started at 22. All that wasted money could have gotten me an early retirement.

A frugal geographer
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Re: Biggest Investment Mistake

Post by A frugal geographer » Fri Jan 11, 2019 8:33 pm

When I got my first real career job in 2013, I thought stocks were at a peak and a crash was imminent. So I only invested up to the company match in my 401k, didn't have an IRA, and sidelined all my extra savings in cash.

Eventually after several years I put most of that sidelined cash into investments and started maxing out my 401k/IRA space. But only wish I didn't listen to the doomsday investors and did it much earlier...

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 8:40 pm

Good Listener wrote:
Fri Jan 11, 2019 6:22 pm
The second marriage. :oops:
:shock:

Grt2bOutdoors
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Re: Biggest Investment Mistake

Post by Grt2bOutdoors » Fri Jan 11, 2019 8:54 pm

Stinky wrote:
Fri Jan 11, 2019 10:40 am
Bought a “hot” mutual fund in 2008. It declined way more than the market. Sold it just four months later at a 50% loss.

Been buying index funds ever since.
Here's one for you - bought Fidelity Aggressive Growth fund after the "hot hand" managed a 100% yearly return (yes, that's right it went up 100% during the internet fad by getting in on IPO's and then flipping them after they went up), the following year, predictably internet dot com stocks flopped as did hot hands - the manager left the fund to work at a hedge fund and my small investment declined by half. Had I just bought any of the boring funds i already owned i could have more than sextupled my money.

Hint: don't buy "the it fund" or "the latest hot fund" it is a mirage.

Yes, even experienced investors encounter small hiccups along the way. The key is to recognize the hiccup and avoid it like the plague going forward.
Last edited by Grt2bOutdoors on Fri Jan 11, 2019 9:05 pm, edited 1 time in total.
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sillysaver
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Re: Biggest Investment Mistake

Post by sillysaver » Fri Jan 11, 2019 8:56 pm

There were too many to mention. Summary:

1) Owning junk bonds in 2007-2009. Got absolutely crushed.
2) Buying gold mining penny stock I learned about through an online promotion. Later it collapsed and was delisted. The name was later changed a couple times to coincide with popular investment trends (China, tech) but it never came back.
3) Selling too soon
4) Trading/investing without a sound plan
5) Not fully taking advantage of low equity prices during and after the GFC (2009, 2010)
6) Churning my portfolio for short-term profits but missing out on long-term trends (this is the opposite of the classic advice "Cut losses early, let winners run"). I recall owning Apple back in the early 00's and wonder what my life would have been like had I realized its potential for growth.
7) It's a little early but I regret buying a single family rental. What a waste of time and feels like we will end up losing money if we sell now.

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RJC
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Re: Biggest Investment Mistake

Post by RJC » Fri Jan 11, 2019 9:14 pm

sillysaver wrote:
Fri Jan 11, 2019 8:56 pm
There were too many to mention. Summary:

1) Owning junk bonds in 2007-2009. Got absolutely crushed.
2) Buying gold mining penny stock I learned about through an online promotion. Later it collapsed and was delisted. The name was later changed a couple times to coincide with popular investment trends (China, tech) but it never came back.
3) Selling too soon
4) Trading/investing without a sound plan
5) Not fully taking advantage of low equity prices during and after the GFC (2009, 2010)
6) Churning my portfolio for short-term profits but missing out on long-term trends (this is the opposite of the classic advice "Cut losses early, let winners run"). I recall owning Apple back in the early 00's and wonder what my life would have been like had I realized its potential for growth.
7) It's a little early but I regret buying a single family rental. What a waste of time and feels like we will end up losing money if we sell now.
Hi @sillysaver. Can I ask why you are thinking the rental is a waste of time? I was considering diversifying into real estate in the future.

evilityb
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Re: Biggest Investment Mistake

Post by evilityb » Fri Jan 11, 2019 9:19 pm

Asking all the right questions to all the wrong people when I was young. I got my first job at 17 and was saving half of my paycheck, asking how I could save for retirement and getting responses like, "you're too young to worry about that, just spend it for now." So, I did. Finally, when I was 28, I got serious and realized how wrong all of the advice was.

What did I learn?
1) Educate yourself. Always check what advice you've been given -- including on this forum -- and run the numbers for yourself. Nobody but you understands your goals, intended life path, or risk tolerance.
2) Talk to others freely about personal finance. I don't think personal finance should be a taboo topic in our culture. A topic with boundaries, of course, but not one that should be off limits. So, I often will flat out say to my friends, "Do you have an IRA open?" and I bring it up with young adults whenever I can.
Make sure the fortune that you seek is the fortune that you need - Ben Harper

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aspirit
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Re: Biggest Investment Mistake

Post by aspirit » Fri Jan 11, 2019 9:32 pm

RJC wrote:
Fri Jan 11, 2019 8:40 pm
Good Listener wrote:
Fri Jan 11, 2019 6:22 pm
The second marriage. :oops:
:shock:
:P The first marriage went well then eh?
Time & tides wait for no one. A man has to know his limitations. | "Give me control of a nation's money and I care not who makes it's laws" | — Mayer Amschel Bauer Rothschild ~

heyyou
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Re: Biggest Investment Mistake

Post by heyyou » Fri Jan 11, 2019 9:49 pm

Late 1970s, my new financial advisor offered a limited partnership (LP) in real estate. A four figure investment paid 50% in 18 months. I then invested the profit and my fresh inheritance in a similar but 10x larger, mid-five figure LP, that eventually failed. I lost all of the $$, and owed back taxes on deductions that it had generated.

A decade ago when I wrote here that I wondered what those $$ would be worth now, a poster cheerfully showed that value in S&P500 shares would equal an amount about equal to my portfolio. Half full, or half empty, is still half.

mighty72
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Re: Biggest Investment Mistake

Post by mighty72 » Fri Jan 11, 2019 10:26 pm

1. Pulled out of the market in 2008. I had just started working and got scared
2. Not getting back in till 2013
3. Not maxing 401k till 2013

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Davinci
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Re: Biggest Investment Mistake

Post by Davinci » Fri Jan 11, 2019 10:30 pm

1). Trying to keep up with the Joneses when I was younger and buying expensive things at retail.
2). Being completely ignorant about finances and investing and not saving enough until age 35.
3). Not following LBYM and not finding Bogleheads until age 35.
4). Keeping Megacorp single stock through 4 splits and not selling until it went to the ground expecting it to keep going up.
5). Not knowing my 401k allowed Mega Backdoor Roth IRA for 15 years.
6). Buying first car new at 10% interest for 7 years. Because of this I still drive it after 18 years and will to the ground to get my dignity back.
7) Not knowing my company offered HDP plans for an HSA for 10 years.
8. Completely ignoring tax reduction/harvesting strategies for 20 years.

Live and Learn but better to learn quickly and early, I can only imagine where I would be now if I had avoided all of these mistakes. :annoyed

Good news is never too late to recover from all these mistakes if one becomes a Boglehead. :D

Cheers,
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.

gorow
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Re: Biggest Investment Mistake

Post by gorow » Fri Jan 11, 2019 10:47 pm

cheese_breath wrote:
Fri Jan 11, 2019 8:55 am
Held onto too much of employer's stock too long.
Employer even provided guidance through third party that suggested I should start divesting of options. Still, I waited too long.
Retired 1/1/2019. Not concerned about sequence of returns because two years here taught me what I need to know.

Dottie57
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Re: Biggest Investment Mistake

Post by Dottie57 » Fri Jan 11, 2019 10:50 pm

1. Didn’t believe I could manage my IRA by myself. Multiple FAs sold me front loaded funds.
2. Should have started ROTH earlier than 2012. Same with taxable.

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whodidntante
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Re: Biggest Investment Mistake

Post by whodidntante » Fri Jan 11, 2019 10:54 pm

I listened to Dave Ramsey's investing advice. He's loud, arrogant, and wrong.

phantom0308
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Re: Biggest Investment Mistake

Post by phantom0308 » Fri Jan 11, 2019 11:02 pm

When I started working at my first job out of college I didn’t have any friends in my new town. I was depressed and read lots of conspiracy theory websites. I became convinced hyperinflation was imminent. I bought physical silver just past the peak in 2013 and saw the price drop by 50%.

Luckily I didn’t have much to lose since I was shoveling most of my money to my student loans. After I met more people and stopped reading that stuff, I saw the world was still fine and inflation was stubbornly staying below 2% despite central banks best efforts.

I’d read about passive index investing and bogleheads in college and migrated here after some time. I still have the silver and use it to remind myself to be skeptical and to respect my limitations as an investor.

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Davinci
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Re: Biggest Investment Mistake

Post by Davinci » Fri Jan 11, 2019 11:09 pm

I’d read about passive index investing and bogleheads in college and migrated here after some time
Phamtom,

I wish I would have known enough to make an investment mistake in college to be able to find Bogleheads at that age. But I was clueless until 35 and that was costly. :oops:

Cheers,
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.

Slow FIRE
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Re: Biggest Investment Mistake

Post by Slow FIRE » Sat Jan 12, 2019 12:17 am

Thinking I can beat the market and purchased individual stocks. :oops:

phantom0308
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Re: Biggest Investment Mistake

Post by phantom0308 » Sat Jan 12, 2019 12:31 am

Davinci wrote:
Fri Jan 11, 2019 11:09 pm
I’d read about passive index investing and bogleheads in college and migrated here after some time
Phamtom,

I wish I would have known enough to make an investment mistake in college to be able to find Bogleheads at that age. But I was clueless until 35 and that was costly. :oops:

Cheers,
Yeah, I got very lucky. There’s a book/website, “I will teach you to be rich” I read between grad school and starting my first full time job which introduced it. The recession pushed a lot of bloggers into the spotlight like Mr Money Mustache, who also advocated low cost index investing until robo-advisors (still relatively low cost I guess) started paying them commissions.

Convincing my gf, now wife to start indexing, and making enough between us to save a substantial portion of our income have also contributed a lot.
Cheers

sarabayo
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Re: Biggest Investment Mistake

Post by sarabayo » Sat Jan 12, 2019 12:37 am

I've always been a saver but I didn't really learn about investment until I was 30, so all my extra cash was sitting around in CDs with dismal interest rates. I did have some money stashed away in a target date fund in retirement accounts, but I had the impression that taxable brokerage accounts were only for hotshots on Wall Street... :oops: Also I had access to mega backdoor Roth contributions in my 401(k) for a year and half without realizing it, so that was a mistake as well.

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Spinola
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Re: Biggest Investment Mistake

Post by Spinola » Sat Jan 12, 2019 2:20 am

Not investing more, earlier.
Not investing in Roth sooner.
Not being 100% equities last decade.

FrankLUSMC
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Re: Biggest Investment Mistake

Post by FrankLUSMC » Sat Jan 12, 2019 7:31 am

1998 opened a Futures account with 12K, was up about 8K at one time, then my trades started failing and got out/closed account with about 2K.
At least I learned to cut losses, it was an experiment and I was disciplined enough not to add money to the account.
Same time frame, my allocation in my 401K was way too high in the high flying T.Rowe Price Science and Tech. fund. Dot com bubble bursted half my 401K.

I had much better AA and discipline to sit quietly through 2008 fiasco, so no harm no foul.

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bubbasour
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Re: Biggest Investment Mistake

Post by bubbasour » Sat Jan 12, 2019 7:46 am

Tycoon wrote:
Fri Jan 11, 2019 9:28 am
Owning tax-inefficient taxable funds.
Hi Tycoon.. this seems to be a lesson learnt for me as well. I was taxed 30% on my dividends as a NRA, and now I'm in the middle of switching to equivalent funds with 15% tax instead. I hope this to make a big difference in the long run and I know Bogle recommends to optimize/minimize tax where possible too.
NRA, Prefer VUSD (VOO) and VWRD (VT), No capital gain tax.

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bubbasour
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Re: Biggest Investment Mistake

Post by bubbasour » Sat Jan 12, 2019 7:49 am

renue74 wrote:
Fri Jan 11, 2019 9:32 am
Waiting until my 30s to really start "understanding" investing. Can't get those years back.
+1

Mid thirties here.. :( wish I was enlightened about Bogle investments principals earlier. However, on the other side maybe we can share our learning to friends and families who may be interested.
NRA, Prefer VUSD (VOO) and VWRD (VT), No capital gain tax.

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bubbasour
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Re: Biggest Investment Mistake

Post by bubbasour » Sat Jan 12, 2019 7:52 am

cheese_breath wrote:
Fri Jan 11, 2019 8:55 am
Held onto too much of employer's stock too long.
Hi cheese_breath, how would you do it different today, any guidance here? I'm kinda in a similar situation, but have been trying to convince myself to diversify by selling off the company stock and buying S&P500 instead. Owning your company stock gives some form of ownership/accountability/pride, but I probably should reconsider this. Appreciate your thoughts here..
NRA, Prefer VUSD (VOO) and VWRD (VT), No capital gain tax.

sillysaver
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Re: Biggest Investment Mistake

Post by sillysaver » Sat Jan 12, 2019 10:38 am

RJC wrote:
Fri Jan 11, 2019 9:14 pm
Hi @sillysaver. Can I ask why you are thinking the rental is a waste of time? I was considering diversifying into real estate in the future.
We're breaking even on our purchase. The agent overstated the rent we could get and we weren't careful enough in our analysis. It went unrented for several months, we went through 2 different property managers until we found a guy who can do it, underestimated repair costs to get it rent ready, had to coordinate all this work remotely, and we just had to dip into our reserves to pay this year's insurance premium, since it was cash flow negative for several months while we tried to figure what we're doing. We also opted for financing (15% down) that leaves us very little breathing room.

Now, we're both kind of regretting it and want to sell, but if we did we'd probably end up losing money.

After all this I think I'd rather just own a REIT, or do more multifamily deals.

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ruralavalon
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Re: Biggest Investment Mistake

Post by ruralavalon » Sat Jan 12, 2019 10:55 am

WhiteMaxima wrote:
Fri Jan 11, 2019 4:11 pm
saving too much, living poor life and dying rich.
But you're not dead yet :) , so go ahead spend away :D .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

infotrader
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Re: Biggest Investment Mistake

Post by infotrader » Sat Jan 12, 2019 11:09 am

As an apple fan who had a cube in the 90s, did not buy AAPL at $18.5/share. A friend bought 300 shares after our discussion.
He is still holding them, about 5000 shares now after splits.

carolinaman
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Re: Biggest Investment Mistake

Post by carolinaman » Sat Jan 12, 2019 11:17 am

I have made my share of mistakes but my biggest was not investing more earlier in my career and investing too conservatively.

Old_Dollar
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Re: Biggest Investment Mistake

Post by Old_Dollar » Sat Jan 12, 2019 11:21 am

Fund switching to "chase" returns. Luckily I was very early on in the accumulation phase with very little in the retirement account. It's hard to see how chasing returns can have a negative impact. It's what I hear on these forums... "Don't just do something! Stand there!"
I am here solely to learn about investing.

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Bulldawg
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Re: Biggest Investment Mistake

Post by Bulldawg » Sat Jan 12, 2019 11:32 am

Toss up between going into business with a partner who proved to be " ethically challenged " ; OR getting involved with Wade Cook's option program .

Come to think of it , it was the partner's idea to go with Cook's " get rich quick" scam , so the partnership takes top blunder .
" IN GOD WE TRUST " ( official motto of the United States )

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fortfun
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Re: Biggest Investment Mistake

Post by fortfun » Sat Jan 12, 2019 11:36 am

baritone wrote:
Fri Jan 11, 2019 12:22 pm
RJC wrote:
Fri Jan 11, 2019 8:41 am
What was the biggest investment mistake that you made and what did you learn from it? In 2008 when the market was crashing, I had no idea what I was doing and tried to adjust my equity/bond allocation in real time... :oops:

Hoping this thread will help new BHs (like myself).
Edward Freaking Jones. I figure they cost me about 100k that I would have if I had gone to Vanguard to begin with. The basics of investing should be taught in high school.
Sadly, I don't think many teachers (I'm one) understand investing due to their pensions. The business classes still have contests, through FBLA, that have students picking individual stocks. I believe our high school students graduate thinking that picking individual stocks is the way to go, as that's what they did in these contests. My district has even let Wells Fargo infiltrate and begin teaching financial wellness lessons (ughh...).

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bertilak
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Re: Biggest Investment Mistake

Post by bertilak » Sat Jan 12, 2019 11:37 am

Not getting started soon enough.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

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AllieTB1323
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Re: Biggest Investment Mistake

Post by AllieTB1323 » Sat Jan 12, 2019 11:39 am

During the late nineties and maybe 2000 allowing an Investment Advisor :oops: talk me into Munder NetNet B. It went up until it fell like a rock.

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fortfun
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Re: Biggest Investment Mistake

Post by fortfun » Sat Jan 12, 2019 11:40 am

bubbasour wrote:
Sat Jan 12, 2019 7:49 am
renue74 wrote:
Fri Jan 11, 2019 9:32 am
Waiting until my 30s to really start "understanding" investing. Can't get those years back.
+1

Mid thirties here.. :( wish I was enlightened about Bogle investments principals earlier. However, on the other side maybe we can share our learning to friends and families who may be interested.
42 & 44 for DW and I :(
Luckily, I have a pretty good pension and should be able to have a modest retirement in our early 50s. However, it was probably the pension that kept me from learning about investing. i.e. "I'm fine because I have a pension..."

jmk
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Re: Biggest Investment Mistake

Post by jmk » Sat Jan 12, 2019 11:49 am

Not taking advantage of space in the 0% bracket when I was between jobs.

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Davinci
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Re: Biggest Investment Mistake

Post by Davinci » Sat Jan 12, 2019 12:19 pm

I believe our high school students graduate thinking that picking individual stocks is the way to go, as that's what they did in these contests. My district has even let Wells Fargo infiltrate and begin teaching financial wellness lessons (ughh...).
forrfun,

Very sad and scary but very true. I visit many schools to get students interested in STEM with fun activities. They started financial classes in these schools and I was curious and the whole 1 hour class was to tell students what things they like such as Starbucks, Disney, Apple and highly encouraged then to buy and hold those individual stocks. After the class I talked to the teacher in private and he clearly believed that picking individual stocks was the way to go. This person also happened to work for Wells Fargo. :oops:

As an adult I keep finding my self bombarded with "offers" and "help" to finance/invest by institutions as Well Fargo so no wonder how many financial illiterate people make these mistakes. They should teach accurate financials and investing information in High School and College based on Bogleheads principles, there cannot be any class better than that in any curriculum. :beer

Cheers,
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.

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