I learned the most from my own financial blunders
When I set out to improve my financial knowledge, I garnered insights from books, investment seminars and like-minded people. Still, my greatest lessons came from my own financial mistakes.
Among my selections were two familiar names. I knew about Eastman Kodak from my college days, when one of my hobbies was developing film. And I was familiar with Washington Mutual because the bank sponsored a spectacular annual firework display that I loved to watch. I naively assumed that these stocks, together with the others I chose, would be good long-term investments. They weren’t.
But within a few months, I realized my mistake. No, the problem wasn’t my ability to repay the loan or hold on to my job. Rather, the stock market was in a slump when I took out the loan and started recovering in the months that followed. The opportunity cost of selling at a low point and missing the subsequent market rebound was significant. To minimize the damage, I repaid the loan sooner than originally planned.
Soon enough, my brokerage account became unmanageable and, quite frankly, absurd. Luckily, I realized my mistake before my holdings had notched significant capital gains. I was able to sell and declutter my account without too big a tax cost. 5. Misjudging my risk tolerance. After learning about derivatives, I tried various options strategies to profit from my newfound knowledge. My favorite approach involved betting that the share price of a high-quality company wouldn’t decline more than 20% within the next few months. My hope was to make a modest profit if I was right, which was highly probable. The risk: If the stock performed worse than expected, I’d have to bear the additional losses.
Argentina Últimas Noticias, Argentina Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Soccer: Waukegan's Julian Mendoza learned goalkeeping earlyWaukegan goalkeeper Julian Mendoza’s older brothers taught him valuable lessons about his position when they were kids.
Leer más »
Cancel culture is losing to small-town valuesGrowing up in LaSalle, Colorado, I learned lessons that seem to be universally taught to those raised in America’s small towns.
Leer más »
Court Rules SEC Must Review Rejection of Grayscale's Bitcoin ETF Bid, Bitcoin Jumps 5%The most valuable crypto stories for Tuesday, August 29, 2023.
Leer más »
The Medina And San Antonio Rivers Are Drying UpLessons for the future of Texas water
Leer más »