Often a times we fail to remember that the mistakes are the best teachers. So has it been for us. We have lost a lot of money across various things in being able to realise what works for us and what doesn’t.
Failure is life's greatest teacher, and the only way we truly fail is to learn nothing from the valleys we experience.
Asset class - Stocks:
Me and Mrs coming from a lower middle class family - we have always viewed stocks as a thing that it will crash and we have to get out before it goes down. We always I mean always - valued stocks as something that we have to buy low and sell high. But it’s easier said than done. There are tons of investment managers, fund managers using sophisticated algorithms, trading charts and what not and in front of them day in and day out - we are just paupers in being able to time and get out with the money that we invested and with some profits too.
Occasionally - we still do get carried away with this thought that it’s easy to make money this way but only to realise that even many fund managers are often not able to beat the market returns. The statistics says nearly 87% of the fund managers cannot beat an index funds market returns. That’s staggering 87%! Link
So, what mistakes have we made:
Invested in stocks that we assumed it’s going to perform better.
Followed so called social media influencers and invested (read lost) money.
During Covid times - we invested in pharma companies assuming they’re going to perform well.
Looked at the trading view chart in naivity and invested in stocks thinking it’s the right time to buy and the movement is going to happen.
Investing in penny stocks that we thought is going to give us multiple Xs.
If the $ value of the stock is cheaper - we assumed that it’s going to create a lot of money into the future.
Confusing luck with strategy. One or two producing money makes us feel we are the smart ones.
Emotional decision of holding the stocks after a significant loss thinking it’s all going to turn around one day.
Remember a stock has to grow 11.11% if it had lost 10% from the time you invested in it.
Explanation:
Initial Value: Let's assume the initial investment was $100.
Loss: A 10% loss means the stock is now worth $90 ($100 - $10).
Target Gain: To get back to $100, the stock needs to increase by $10 (100 - 90). This is an 11.11% increase ($10 / $90 * 100 = 11.11%).
Total Gain: To gain 20% from the initial investment of $100, the stock needs to increase by $20 ($100 * 0.20 = $20).
Total Increase Needed: To achieve the target gain and recover the initial loss, the stock needs to increase by $30 ($20 + $10) from its current value of $90. This is a 33.33% increase ($30 / $90 * 100 = 33.33%).
Constantly selling out existing ones for to have found another glamorous one.
We didn’t have a plan of entry and exit strategies. We assume, hope and prayed the invested money is going to grow and we never knew even when to exit out. We just sprayed and prayed.
We have chased the hype with FOMO without understanding the business or their P/E ratios.
Total Money Lost with stocks > 50k AUD. OUCH!!!
So, what did we learn from it:
There’s a special kind of sting that comes from losing money we’ve worked hard for - not because of recklessness, but because we thought we were making the right call. We’ve been through that.
After several attempts at picking individual stocks - and experiencing more pain than progress - we’ve come to a clear and honest conclusion: this isn’t the game for us.
We didn’t have a reliable system. We couldn’t time our entry and exit with precision. We weren’t managing it full-time - and frankly, neither are some of the seasoned fund managers who do this day in and day out.
We learned something crucial: knowing our circle of competence, and staying within it.
There’s no shame in that. In fact, we’ve come to respect those who can navigate this world with skill - those who live and breathe charts, earnings reports, and macro signals. But we also recognised that our time and energy are better spent elsewhere.
As a parent, as someone with a full-time job, and a life beyond the screen, I realised I didn’t want to spend my days, evenings and late nights into deciding whether to buy, sell, or hold a position - or worse, second-guessing every move.
So we made a clean break. We’ve exited all our individual stock positions. We now hold none.
It was hard to let go - especially when some losses still linger as emotional bruises. But the clarity we’ve gained is worth it.
Thank you for reading this far. I’ll continue to openly share the losses, missteps, and hard-earned lessons we’ve gathered - not to dwell on the pain, but so you might take away something valuable without paying the same price we did.
Awareness leads to attention. Attention leads to action. My goal is to help you move through that path - so you can make choices that protect and grow what you’ve worked so hard for.