How will you describe your investing journey so far?

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Joined: Thu Mar 12, 2020 7:10 am

Re: How will you describe your investing journey so far?

Post by longjohn »

Overall my investing journey has been great! But I do have a couple of pointers that would have made it even better:

1) Diversification is important, but when you are starting out, don't worry too much about it. I focused way too much on this, meaning that my positions in stock-picking where very small sub-1000 EUR.

2) Let the winners run, again to 1), forget about the diversification, it doesn't matter that one of my biggest winners took up almost half of my portfolio due to it doing 6x return in 5 years. If the fundamentals are there, forget short-term overvaluation and let it loose. I cut back about half of it and now it is at 10x return.

3) Invest more, go long-term index (I use Vanguard FTSE All-World UCITS, VWCE), forget about short-term overvaluation expect keep some cash if it makes you feel more comfortable (I am doing this now in case of second wave downturn 2020 for December).

TL;DR put more money into the broad index market, keep them there long-term (10+ years), let the winners run, forget about diversification in the beginning - it doesn't matter until you hit EUR 20-30K. Of course not all egs in one basket, but if you start with EUR 10K, you could split this in two positions, VWCE and a stock pick, rather than what I did 6-7 stock picks and VWCE.. Gains are small, trading fees are high xD
Posts: 40975
Joined: Fri May 11, 2007 11:07 am

Re: How will you describe your investing journey so far?

Post by Valuethinker »

Main lesson I have learned.

Get your funds right in the beginning. Broad indexation. Low cost.

Then avoid looking at your portfolio. Just keep investing.

I have a habit of being out of the country when markets go haywire. Was in the jungle on the worst days of March. I was glued to the news, but did not or could not trade. Thus I "stayed the course" - by the time I got home the country was in lockdown, huge stimulus packages were being announced, everything was far too chaotic working out how to work with my newly distant colleagues, how to go shopping etc, to worry about my portfolio.

Frequent staring at your positions is the enemy of a good long term strategy.
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