My Learning from My Investing Mistake

I started investing in stocks almost two years back. I wanted to learn the basics of investing (Though I must say I am still learning). But those days were the initial days of fear and small investments from the money I saved which my parents sent for my college studies.

Once I got a suggestion from my friend to buy shares of a Bank ( A nationalized bank in India). He told that the share price is expected to go up in the next three months. Acting on his suggestion I bought the 50 shares @ Rs 32/- per share.

Soon after that my eyes started going to the bottom of any news channel watching the fast moving ticker. I started observing the price movement after every 15 minutes on the college television.

The other effect was that the share price caught a downward trend the day I bought them and after three months it was Rs. 7 less i.e. almost 10% down. Then I stopped bothering about it until today (two years after I bought the shares) when I spoke to my friend.

I told him,” Bank share is still going down! And it’s almost two years now”, “ Its your mistake that you listened to my suggestion”, was his reply and i was shocked. I learnt two big lessons from the whole episode.

  • Neither you should suggest nor you should take advice from someone other than you.
  • Set upon a loss target that will stop you tracking the stock price every now and then.

You can always get advice with professional money managers instead of going to a friend, who knows nothing or knows something you know too, about investing. If taking tension solves problem then take it, otherwise plan, and follow the plan.

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