I want share what I have learned investing in stocks for one year. As a beginner I have made many mistakes and have learned much from them and I want to share all of it.
Its already been a year since I started investing in the stock market. I remember exactly 1 year ago I started by creating an account with trade republic. Verification took 2 weeks and the deposit took an additional 2 days. I have definitely learned a lot in the last year.
1. First Deposit
My first deposit was 1 thousand euros and as a first exposure to the stock market it might be too high for some but I thought it was just the right amount for me. As a beginner who has never invested in the stock market it can be difficult to put even 100euros in their brokerage account but one needs to start somewhere. Thinking back now I wish I had started with more.
2. Not starting with ETFs
I had never heard of ETFs before I started my research. I knew about stocks and mutual funds so I thought ETFs were something similar to Mutual funds. Thats why I started with individual stocks mostly because the market was low and everything seemed to be on sale compared to their previous performance. I bought BASF, Carnival, Boeing, Volkswagen, Deutsche Post and store capital. Those were some very good companies but as a beginner it wasn’t a good decision from my part because I didn’t do much research and as a beginner I did not know how to properly research.
3. Buying at the top and selling at the bottom
Everything was in green and I was up 20% just in a month but in May things started to go red and my 20 % started to decrease to 10% 5% 2% and then it started to go red -5 -10% and i started to panic and started selling and by the middle of May I was 20% down overall. Its weird if I had just held on to my initial investments I would have be up by more than 200%. This is where most beginners struggle, when the market was down I used to open my trading app after every 10 minutes to see how much I had lost. The more I looked the more I anxious I became and the more anxious I became the more rash decisions I took. Now whenever the market is in red I think of it as a big discount I can buy more stocks at a cheaper price and when the market is up my portfolio value is getting higher
4. Following market trends
I started following market trends, anything that was going up I bought in without even looking into the companies, I went to different youtube channels and bought the latest hot stock of the day. Some of them were actually very good buys which I still hold today but most of them were crap and I lost some money with those companies. Just recently with the Coinbase IPO many people went in guns blazing the stock went up and then way down from what it started at just a couple of minutes ago.
5. Conviction buys
With a couple of months of experience in my hand I started buying with conviction or at least doing proper research about the company fundamentals. Looking at different variables I found a company where I did proper research and actually made decent profit on a stock which was actually a penny stock.
6. Wasting money chasing Penny stocks
With the success of that penny stock I started looking into more and more penny stock to invest in. I am not saying that penny stocks are bad for example Nio was a penny stock just a year ago but as a beginner its definitely something to stay away from as the chances of loosing money on them are way more than getting a profit.
7.Stopped searching for quick money
I know it is very hard to realize that it takes time to build wealth. People who start investing in stocks just want to make their money double in a few days. It can happen but for most people who gamble they loose their money and the house always wins. So I stopped chasing for quick profits as I dont have that much time to do hours of research everyday looking for a great deal. Many people also dont have that much time going to work from 9 to 5 , having a social like its very hard. So I also put 70% of my stock investments in broad market ETFs which are usually very stable.
Hopefully you can learn something from my experiences and if you have experienced something similar please write down in the comments below. You can download my Free ebook “A beginners guide to investing in Germany”
*None of this is meant to be considered as investment, legal or tax advice . As I am not a financial expert nor a tax consultant please do your own research and come to your own conclusions I am only sharing my experience with stock investing. The video and articles are accurate as of the posting date but may not be accurate in the future.