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I got into investing in 2020 - like many others.. I had bought some crypto a few years before.. I bought some stocks right when covid hit as I saw it as an opportunity.. and I was right and did well..
Then my net worth increased - and for a number of years I was into dividend investing - primarily concerned with increasing my dividend income - and had a somewhat diversified portfolio.
Then last year - I randomly decided to do a swing trade - I didnt even know thats what it was called, but I piled a large amount of money into a bitcoin etf - as I noticed it was trading reliably sideways - and sold when it went up 5%.. made a ton of money in a matter of days.. I was hooked..
Then I did it again with a few other stocks.. and made 6 figures in a few weeks.
I think you know where this story is going - but .. I got greedy and thought I had cracked the code - I was going to print money indefinitely or so I thought.
I piled most of my net worth into a single blue chip stock - but it dipped down for a few months and I got inpatient and sold for a loss..
Then I did it again.. piled a large amount of my net worth into another single stock... it dropped again for many months until I finally capitulated and took a huge loss.
It took me an entire year to get back to break even. Around this time I also learned about options and got into selling cash secured puts and covered calls.. I actually have made a lot of money with options..
Then recently.. I thought I had learned some hard lessons but clearly they didnt download into my brain..
I piled a very large amount of money into Novo nordisk- and was making lots of money for a few weeks - I had some instincts to sell and pull it out and stop being so risky.. but my greed overshadowed my common sense..
and it tanked big time today.. I sold for a huge loss for a few reasons - one because I will use that loss to offset some gains on my taxes and also because experience has taught me that once sentiment turns negative on a stock - it can drag sideways or down for a long time.
All this to say.. I'm having a rough few days and realizing I've treated "investing" like a casino.. and I really haven't been investing at all - I've been gambling - and trying to hit a home run with every trade - with huge position sizes.. instead of having a diversified portfolio and holding for the long run and letting it compound slowly overtime. I feel embarrassed and frustrated with myself for being so foolish. I'm also concerned that I got burned badly before and still continued the same behaviors and got burned yet again..
Part of the problem is - I made "investing" into my day job - as I had enough funds to live off of.. so everyday I would look at my portfolio and feel like I had to do something, take some action to make money.. instead of buying great companies and forgetting about them and letting it grow through ups and downs over time. Intellectually I know these things, and yet it seems I've struggled with discipline. I've made being an "investor" part of my identity - and what I tell people I do for work now.. and I fear if I just put it all into ETF's and set it and forget it - what will I do with my time.. I suppose in someways managing my portfolio and taking risks became an addiction. Maybe I should buy real estate since its less liquid and more stable and that would stop me from being able to make rash decisions.
Thanks for listening to my ted talk.. If anyone can relate or has experienced what I've been through, I'd love to hear from you.. and for everyone else, use my experience as a cautionary tale. Make sure you're investing and not gambling and chasing gains. Slow and steady wins the race.. and diversification stops you from being emotional.