3 Lessons That Will Cost You Thousands

Quote

“We can make up for lost money, but we can’t make up for lost time.” - Simon Sinek

3 Lessons That Will Cost You Thousands

The stock market is like a candy store.

Everywhere you look there is another strategy, trade group, or hot stock trying to get your attention.

Over my relatively short stock market career of 6 years, I have dipped my hands into a number of candy jars including options, day trading, penny stocks, ETFs/index funds, and dividend/growth investing.

Here’s 3 lessons those jars taught me.

1) Short Term Trading Is Hard

Yes, trading short term is fun, sexy, and challenging.

Daily swings in the market are extremely unpredictable. One has no way of knowing what economic news is going to come out, what the President might say (or not say), or what is going to happen in an ongoing war halfway across the globe.

Truth is, for 99% of people your time is better spent elsewhere. For example, investors who bought and held the S&P 500 over the last 10 years outperformed 85% of large-cap portfolio managers. (source)

They buy consistently, sit back, and let the market do the work for them while they focus on other areas of life.

Whether it’s using dividend stocks, growth stocks, Roth IRAs, or ETFs/index funds buying and holding is your best friend.

When I look back on my time spent day trading, I would have much rather spent those hours learning a skill or finding a way to increase my income.

2) Chasing Is For Suckers

If there is one thing true about the market it’s that some “hot” trend will always be fighting for your attention.

This might be a new IPO that has Jim Cramer hollering on CNBC, or it might simply be a company paying a massive dividend that you can’t stop thinking about.

I’ve chased both. And both have cost me. Here is a few examples showing my pain, so maybe you’ll pinch yourself before chasing like a sucker.