I lost Money in Stock Market

“ Patience is not the ability to wait, but the ability to keep a good attitude while waiting.”

I lost money in the stock market

I once believed that I could pick the correct stocks because I always played the contrarian techniques while buying my stocks. Losing in the stock market was never an option for me. I entered and bought my stocks only during big market correction and hold for the long term.

My first Malaysian stock back in 2001 after saving a few thousand from my internship was Public Bank ( PBB). How lucky I was when I got the share at around MYR2+!

I made a profit of almost 50 percent after one year and I sold, pocketing my money, and made a few lousy purchases after that and lost all my previous profit in the stock market.

One mistake will make you a loser in the Stock market

You can be right always but one wrong buy might drag down your whole portfolio. How many stocks can you own in your portfolio as a retail investor? 10, 20, or 50 different stocks? Can you follow all these companies’ quarterly reports, company profiles, insiders’ trading, and news every day??

This approach has proven me wrong because I do not understand and do not know how to read company financial reports!! Even I know how to do that, you won’t be sure whether those reports are fabricated or not!! Look at Enron’s case in the US and recent Luckin Coffee scandal.

Better Option- ETFs/Index Fund

For me, an easy way out is buying a basket of stocks ( >500 companies if you are buying S&P 500 index fund and >3000 companies if you choose Total stock index) because you don’t even have to bother which company survives and goes bankrupt!

And I know it is unlikely and almost impossible for all 500 or 3000 companies bankrupt together!

You think you would buy more stocks and average out during market sell-down but when the time comes, you will be shitting out your pant and worrying stocks you are holding might go ‘kaput’ ( bankrupt). You won’t stay on course and you would start selling stocks you are supposed to buy more and buying stocks you are supposed to sell more!!

If your broker tells you he/she can help to pick a winning stock and help you to time the market, turn away, and RUN! Remember the story I told you? If it is TOO GOOD TO BE TRUE, it is 100% ( sorry should be 99.9%) NOT TRUE!!

Looking at the fluctuation of individual stock price every day and being harrassed by Mr. Market non-stop to buy or sell. Let reassured that you would not hold your individual stock portfolio LONG TERM. AND remember the first principle in investing? YOU NEED TO HOLD LONG TERM!!

The underlying business that you are buying matters, not the stock’s daily fluctuating price! By buying all these 500+ great American companies ( investing in S&P 500) and own them for the long term, I am sure that I will win in long run compared to those who are trading individual stock or just owning 10-50 individual stocks!