The story of a stock market beginner is something many can relate to. You start by buying stocks, making some profit, but then the experience turns into an endless rollercoaster of emotions. In this post, I'll share the various situations I've encountered in stock investing and the lessons I've learned. Through my trials and errors, you'll see what you can learn from my experiences in the stock market.
The First Profit and Greed of a Stock Market Beginner
When I first bought stocks, I was lucky enough to make some profit. On the internet stock message boards, I saw posts saying that the stocks I owned should at least go up tenfold to reach their fair value. So, I decided to sell when they reached 11 times their value. However, the stock prices stopped rising and began to stagnate. I then lowered my target from a Genesis to a Grandeur, and then to a Sonata. Eventually, my gains turned into losses, and the message boards were filled with negative posts. Finally, I lowered my goal to just getting a transit card, and my anxiety started to grow.
The Regret of Switching Stocks
I bought new stocks, but I kept looking at my old ones. Unfortunately, the new stocks I bought started falling right after I purchased them, while the stocks I had just sold began to surge. In the end, I switched back to the old stocks, but the ones I sold kept climbing, and the ones I repurchased hit their peak right there. This experience taught me the importance of holding onto stocks if you believe in them, though at the time, it was really disheartening. I spent my days checking stock prices, feeling anxious.
The Virtue of Patience and Endurance
Despite the falling stock prices, I thought staying calm and holding onto my stocks was the mark of a skilled investor. But as the prices kept dropping and my losses grew, I couldn’t hold on any longer and eventually sold my stocks. I decided to set stop-loss limits and stick to them. However, missing the right timing to sell resulted in significant losses. This made me realize just how crucial it is to make decisions cool-headedly.
A New Start, and Yet Again
I bought new stocks again, but the next morning, the opening price had dropped 5%. After much deliberation, I decided to hold onto them, but I ended up incurring more losses. Feeling down, I found and joined a stock recommendation site, but I still kept losing money. No matter how long I waited, my losses only accumulated. Eventually, I sold all my stocks in frustration and quit the site, even though my paid membership was not over.
The Importance of Setting Stop-Loss Limits
With a new mindset, I started over, deciding to strictly adhere to stop-loss limits. Reality, however, didn’t always go as planned. I bought a new stock at the closing price, feeling confident it would soar the next day. But when the loss exceeded 3%, I planned to sell immediately, only to see the opening price drop 5% the following day. I agonized over whether to sell or not and ended up holding the stock, only to incur more losses over time.
The Temptation of Stock Recommendation Sites
In my low spirits, I searched for stock names online and stumbled upon a stock recommendation site. Seeing their glowing past performance in red colors, I got excited and joined by paying the membership fee. Yet, I kept losing money. When I asked why, the site operators said it was just a temporary downturn and to wait it out. But no matter how long I waited, the losses kept piling up. Finally, in a fit of anger, I sold all my stocks and left the site, even though my membership period hadn’t ended.
Conclusion and Lessons
As a stock market beginner, I went through a lot of trial and error. But through it all, I learned some crucial lessons. It’s important to believe in the stocks you buy and hold onto them, but it’s even more vital to set stop-loss limits and stick to them rigorously. For stock market beginners, caution is paramount. From my experiences, I hope you can become a wiser investor. Remember, stock investing should be approached with a long-term perspective rather than chasing short-term gains.
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