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Thursday, October 11, 2018

The Value Of Your Investments Can Also Go Down

Last year you may recall that I got very excited when I bought some shares, and especially when they went up 10%.

They went up and down quite a lot but they were often 10% ahead, which would have been a nice £500 profit.

I had invested pretty much all my savings in there, £5,000, which was my redundancy money from Easynet.  I wasn't using it, so I thought I should put it to good use and get it to grow using my wisdom - I've always fancied myself at being able to spot an investment opportunity - I often do pick out trends and future winners.

Quite why I thought I knew enough to make money from companies selling computer chips and parts for self-driving cars is another question - hardly my areas of expertise.

And then pretty much since the start of Donald Trump's trade war this year, the shares have been falling.  Erratically, but the trend was down.  I didn't want to sell at a loss, I wanted to wait until they went back up again.  They would, surely?

I stopped looking at them as I became too scared about how much I might lose.  Then a couple of weeks ago when I looked, I was £700 down.  I did feel a sense of foreboding and wanted to sell, but decided to wait until they went back up.  They would, surely?



I hung on and checked again last Friday, at which point it would have been just short of £1,000 loss.  I decided to sell if it went over a £1,000 loss.

It did on Monday.  I didn't sell.  By Wednesday I had lost another £300.

I have now sold all my shares at a loss of £1,460.58.  Which is a fuckload of money to me.

Being a man of small means, still trying to find my way in life with no property, a low salary and very little pension - and being nearly 40, this money was kind of important to my future.  Well...maybe I was just going to go storm chasing with it for my 40th birthday.  But had it grown into something decent, then I could have done something even more constructive than storm-chasing with it.

Was it a mistake?  Yes.  Do I regret it?  Yes.  Will I regret it in 10 years?  Maybe not.

My biggest mistake was to ignore a good friend who told me to have a diversified portfolio.  No, I knew best and chucked 80% in one company, with the other company doing something similar.

I kept a watchlist of shares that I wanted to buy, and most have gone up.  Norwegian, which nearly doubled overnight at one point and I would have sold.  Nvidia, which was up 20% a few days ago but has taken a hammering recently.  Boohoo which is up 40%.  Only two have dropped that I considered buying, Facebook and Tencent.  I haven't done the sums, but had I invested in all the companies that I considered, I would still have been ahead now - well ahead assuming that I sold Norwegian when they doubled.

I also thought about buying shares in Infineon (the company I invested most in) nearly a year before I did, and had I had done so, I would have been 30% or so ahead still.

Also, I've always thought the key to doing well in the stock market, was to buy shares during downturns, during recessions.  Of course, I bought them at the top of one of the longest-ever stock market rallies.

So buying shares per se wasn't the issue.  What I bought and particularly the timing, was the issue.  My strategy, and lack of common sense fucked me over.

Now I am £1,460.58 down and I need to recover my losses.

Bearing in mind that on a good month I have £700 after rent and bills, this won't be easy.

As tempted as I am to stick all my money on David Lammy being next Prime Minister, in reality this means cutbacks in expenditure and/or increases in income.

So a very boring 6-8 months is ahead of me, with minimal drinking, no proper going out, no buying things that need replacing...I have a huge list of things I need to buy...mostly because I have put loads of weight on and nothing fits me.  None of my coats button up and winter is around the corner.  It is truly back to austerity.

I was hoping to fund a trip to Japan next year (part current savings and part from 3 month detox savings) but unless I have a financial miracle (ie a significant pay rise from one way or another) then that isn't happening.  In fact, there will be no booking holidays until I have reversed my losses.  Thankfully my upcoming trip to Budapest is paid for, bar the beer and vegan cheese.

Hell, I might even have to give up roast dinners for a few months, or maybe just do them once a month or something.

As well as cutting back, I will have to try to find some more income.  A few web development side-projects on weekends would be ideal, alas I've only had two proper website customers so far, so my portfolio is fairly minimal.  I'm not very good at selling myself, but I guess I'll have to get out there and find some people that need a website.

Alternatively I need either a promotion or a new job.  The former is far more preferable...but maybe I'll crack under a lack of roast dinners and attempt the latter.  I don't want to, but a lack of gravy can make a northerner do crazy things.

It's shit.  It is really fucking shit but I'm not actually that down about it.  It is only money, which I accept is easy for me to say - once you have the basics covered in life, which I do, then money becomes the door to extra opportunities.  Some doors have been closed for me, I won't be able to treat myself or book a holiday for a while, but they are minor inconveniences.

I am pissed off with myself for bad decision making though.

On the bright side, I did get a £4.70 refund for a tube delay today.

There should be a further bright side too...I should lose weight.  I should be healthier.  It should force me to look into new earnings opportunities.  It could even open more doors than it closed.

This isn't the end of investing in the stock market.  It is just a very painful lesson that I already knew but totally ignored.  Time to save some cash and wait for the next recession.

I blame the Tories.