The Ugly Side of Investing
If you’re one of the many new investors taking advantage of this volatile market, I applaud you. For one, you’ve taken the first step to making your life better financially. You’ve ventured into the deep end of the pool and that requires an inordinate amount of chutzpah.
Investing, however, is not a game, and those who have profited off the irrational bull runs of the market have had the good fortune of not yet getting burned by the market. In my long but fulfilling years investing, I’ve seen the money roll in but a topic most are hesitant to talk about is the ugly side of investing. With everything in life, risk lives in this very trade (pun not intended), more so potentially than your typical 9 to 5 job.
Numbers don't lie but people do. Your emotions and fallibility as a human will without a doubt drive you to make bad investing decisions at times. I myself have made plenty of bad investing choices. They have ranged from buying companies based on hype to not doing thorough enough research before making an investment. While I have to live with these mistakes, I also get to learn from them more so than the advice of others. Nothing teaches us better than the harsh lesson of losing our own hard-earned money.
Another huge part of my outlook towards investing is recognizing and accepting that there will be down days. There are so many parallels we can draw between investing and everyday life. We do not let bad days take us down, and neither should we let the occasional bad investment do that to us. All too often, I see people throw in the towel simply because they’ve had their first red day. The realization that some of us simply are not cut out for risk in life is a sobering reminder that this is not for everybody. Learning to be comfortable amidst the uncomfortable fact that your investments will not always be doing well is an ugly yet integral side of your investing journey.
Perhaps the most important aspect of investing that most of us need to know is that it requires effort. Sometimes, the effort will not justify the reward. The endless hours spent learning, analyzing, and taking the plunge are more arduous than most imagine it to be. Should you be expecting any less though? Certainly not. The average person slogs day in and day out trying to earn their keep, why should this be any different. If investing was so easy, everybody would be doing it and everybody would be profitable.
It takes time to learn to love what you do. The same applies for investing. There will be ugly days where you feel like absolute crap when you see your hard-earned money slowly whittling away. Accepting that this is an inherent truth you will have to deal with regardless will only serve to help you become a more informed and enabled investor.
For those of you who have been hit hard by the stock market, I get it. From one investor to the next, I bring a message of hope. The red days will one day pass and soon you will reap the profits of your efforts and perhaps you will learn to see the beauty in the ugly side of investing. Till then, invest safe.