Here’s what I did.
When I first started investing in stocks, I lost most of my money many times. I discovered one crucial distinction and learned How to Stop Losing Money on Investments.
That was 20 years ago and some of the sure-fire bets went bust in the meantime. One firm soon disappeared in a cloud of debt. Another grew first, then shrank. Then shrank some more.
Are you getting the picture? It seemed the more I tried the worse my can’t lose investments lost.
Something was wrong but what could it be?
Stop The Losses
The turning point came when I realised the distinction of who benefits from advice if you follow it. Buying stocks benefits some whereas others gain reputation when they’re correct.
I set about reading, lots of reading, until sorting the wood from the trees became natural. Nobody is born with great knowledge so, like everyone else, we can gain it ourselves. Studying history is important too, not only learning financial and economic technical terms. Every situation that could cost you dear has similarities in the past.
The old saying is that history doesn’t repeat but it does rhyme.
An Investment Learning Cycle
I realised that stocks, and indeed corporations, are not an island. They exist in a world of cycles and human behaviour. We have economic cycles, debt cycles, product cycles and many more to consider. And with human exploits there’s a healthy dose of psychology to explore, or even the madness of crowds.
Successful investors giving back to a world that’s been good to them is an invaluable pool of advice. The Bill and Melinda Gates Foundation do generous work in education and health. Likewise, successful investors share generous guidance. People such as Ray Dalio, Bill Gross (aka The Bond King), George Soros, Carl Icahn and of course Warren Buffett. We can avoid painful mistakes if we heed the lessons shared by these helpful investors.
What’s bad became good, the cause became the solution
By 2010 I was ready to pile in and make some real money, but not so fast. The precarious mountain of debt that caused all the trouble in 2008–09 was still there. Not only that but Joe Public couldn’t rely on the world they thought they understood. The central banks lost their stoicism and experimented, devising a genius solution to the 2008 bubble, blow an even bigger one.
Paraphrasing Orwell’s Animal Farm, what’s bad became good, the cause became the solution.
In time, though, Bob Ferrell’s 10 Timeless Rules of Investing won through.
Old Investment Rules Work Again
Debt has started to matter again. Corporations have to pay more interest and loans are getting harder to refinance. The ease of selling without lowering the price is waning, i.e. liquidity is evaporating. Prices do matter after all. Like shoppers looking for discounts when money is tight, so too the luxury stock valuations seem untenable once the love has gone.
Only through exploration do we discover life is a huge adventure with a golden future for us all.
19 years after I bought the first 700-page tome on investing, the corner has turned. The future is never clear and previous financial events often surprised me. But, this time, events seem to be unrolling in slow motion. History in the making? If I had to bet, I’d say that soon many, many stock holders will all try to be first to leave the market through one small door.
Learning new things helped fix my problem as well as creating the next set of opportunities.
Explore anything and everything that interests you if you want more from life. Only through exploration do we discover life is a huge adventure with a golden future for us all. And who knows, if your investments work out well, perhaps we’ll see your yacht moored in the marina one day?
So How to Stop Losing Money on Investments? Learn constantly and be very aware who benefits from advice you read.
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