Hi Impatient Investors!
The stock market and any form of investments really, represents an opportunity costs. Technically you can spend your money on anything, literally anything, but you cannot buy everything. So the formal economics definition of opportunity cost, what you have to give up to buy what you want in terms of other goods or services, according to econlib.org. Therefore any investment is an opportunity cost, every single one. Which can make it very frustrating.
What Makes It Frustrating
Opportunity cost is literally everywhere in the stock market, because you have to make a decision to buy or sell. You might buy this stock instead of that stock. You might sell too early or sell too late, or you might even buy for too much and sell for too little. It’s like a mind game in a sense. For impatient investors especially, we experience this frustration often but it happens to the best of us. Even a well thought out strategy has an opportunity cost (you could be doing something else), a strategy only helps to prevent a fear of missing out. Strategies can include buying dividend stocks, high growth stocks, different derivatives such as options and futures, puts and call.
Worst Investing Mistakes
The worst stock investing mistakes I have made happened early on, mostly stem from selling too early. For those in the market long enough, we know to zoom out because stocks mostly go up. Earlier in my investing journey as an impatient investor, I just wanted any profit. $MSFT from $50 to $55. Sell. $TSLA from $50 to $70. Sell! $LRCX from $250 to $300. These are not loses, but in the stock market, we should view them as opportunity cost. There was a lot of profit left on the tables. So for impatient investors, it is easy to see that one of the major problems is not waiting long enough for a stock to run, those stocks were held for days, not months or years. So an update on the stocks mentioned above for those not familiar, $MSFT is above $300 in 2023, $TSLA has run and split and run and split and run some more, and in 2023 costs over $240!
Learned Lessons
It is important to be patient when investing. It is also important to do research before investing and at least have a why. Know why you bought a stock because if you buy a stock just because it is popular, any downward movements would be worrying, but the people who really know, just caught a sale. So be careful when investing, also diversification is highly encouraged because individual stocks can make unpredictable movements to either side. Even TSLA experienced a major decline in share price, any news can affect a stock. So research, patience and diversification is important.
Your Worst Investing Mistakes
To soften the blow, and to be realistic, there are really no investing mistake, look at them as learning opportunities. Even an investment made in error could be winner and even “good” investments can have rough quarters and years. Of course there are ways to avoid these bad investments through analysis, but you cannot predict the future.
Now for you, the reader, what investment would you call your worst?
Comment Below!