You can read all the investing books in the world, but some things you only learn by doing.
I’ve been investing on and off for 7-8 years, but Freetrade really got me back into it this year. Here’s what I’ve learned in 2019:
Pay attention to when earnings are
My worst moment of the year was when I bought Texas Instruments, unaware that the earnings were being released 3 days later. When they came out, the stock tanked 7.5% in a day. Having learned this lesson, when I invested in Okta, I bought either side of the earnings date and this was more successful.
Netflix has been my worst performing stock this year. I bought on 31st Jan and after some gain, I was down 25% by late September. I’m quite good at buying and holding, so I just waited and it’s slowly risen back to a point where I’m down 2.7%.
If you’re confident, buy the dip
When Netflix was down so much, it made me question my views about whether it was a good company or not. In retrospect, I should have stuck with beliefs and bought more when it was down. I didn’t “buy the dip” this year and it’s something I want to try next year.
Allocate based on your confidence level
I know a lot more about some of the companies I own than others, and this gives me a varying level of confidence in them. I’ve allocated based on this confidence and it’s worked well for me this year. Apple is my biggest holding and since I bought on 31st Jan, I’m up 66%. I follow the company more closely and know more about it than any other.
Beware currency fluctuations
I’ve never paid much attention to currency fluctuations and although I knew that they could affect investments, I didn’t really see how this impacted me until this year. When the election result came out, some UK stocks went up 10%. Because the pound gained 2% and most of my investments are in dollars, it had a mainly adverse effect on my holdings. I’ll pay more attention to this next year.
Google Sheets is great
I hadn’t used a spreadsheet to track my finances before, but this year I discovered the GOOGLEFINANCE function and all of the ways you can use it. Now I have a quite advanced portfolio tracker and watchlist which gives me a much better way to track my investments than the standard info in the Stocks or Freetrade apps.
Stock evaluation websites
I didn’t know about the many stock evaluation websites until this year. The main one I’ve started using is Simply Wall St. after I saw it on @Certi.Curti’s YouTube channel. I haven’t paid for Simply Wall St (although I’ve been tempted), but it is a helpful way to research potential investments. I’ve also copied the way that they format their return reports for my Google Sheet.
Know your strategy and comfort zone
The more time you spend learning about investing, the more opportunities you’ll be tempted by. The problem is that you could get drawn into buying stocks you don’t understand. This year I’ve been good at largely avoiding this. I got interested in housebuilders after the election, but I know nothing about this industry so I’ve stayed clear.
Instead, this year has allowed me to reflect on what I want to invest in. My strategy is to focus on companies in the tech and consumer sectors. I prefer those with strong brands and a great customer experience. I’m mainly looking for growth, with a minor interest in value and dividends.
YouTube channels are a mixed bag
A lot of investing channels have very clickbait-y titles and thumbnails, but there are a few good ones. My favourite is The Swedish Investor, which summarises investing books.
This community is awesome
I’ve gotten a lot of value from the discussions here this year. For example, when I was researching Twitter, I post my thoughts and a couple of you responded with words of warning. Being able to share ideas with likeminded people makes investing a much more interesting and rewarding experience.
What did you learn this year?