It’s been a massive year for investors, and the Rask team has been making the most of the opportunities in the market during the year.
In this article, we share our team’s biggest investing lessons during 2021 for you to gain an insight into what we’ve learnt during the year.
From discovering what shares are to refining your portfolio construction rules, we’ve got plenty of investing lessons to share with you today.
– Rask Media Contributor
Too many to detail in 100 words! Cut your losers early. You’re not gonna get every stock pick right, and when you don’t, act quickly and sell. You can always buy back in later, but don’t sit on losers. It takes away time from your winners and is an unnecessary burden on your mental capacity.
Admitting defeat isn’t a sign of weakness but a mark of strength.
– Rask Media Contributor
Simplify portfolio construction to reduce the number of decisions required.
Still not sure what that looks like though, and obviously it is different for everyone. But the idea of having portfolio rules (e.g. 20 stocks, 5% each or 10 stocks, 10% each; buy 1% allocation every month with your best idea, etc) reduces the number of decisions you need to make.
Sally O’Brien – Graphic Designer & Copy Editor
I’m at the very beginning of my investing journey so I completed Rask’s Beginner Shares Course at the start of this year. It’s been really handy to build that fundamental, base knowledge of share investing to draw upon in the future.
– Rask Media Contributor
My investment lesson from 2021 is that the market is willing to punish businesses that don’t demonstrate strong growth every quarter, even if the long-term is still compelling.
That’s not exactly a new revelation, but I think it has been demonstrated several times with plenty of the most promising ASX growth shares.
– Rask Invest Analyst
You can’t borrow conviction on other people’s ideas.
I would often get excited about an investment idea published by someone else’s research and then make a small position. However, when the share price drops, the key factor that enables you to maintain your emotional fortitude is the groundwork you’ve done yourself. There is no better alternative.
Otherwise, you’re often left second-guessing the quality of the person’s research, which is entirely outside of your control.
You make your own luck.
Monique Pizzica – Podcast Producer & Videographer
Now is the time to invest in shares! I haven’t yet delved into anything, but I am learning a lot on the way and hope to invest soon.
– Community & Education
I don’t think there’s any other way to put this, investing is an act of hope. Hope in your financial future, your family’s future and the future of the world.
Sometimes I joke that if you’re not willing to invest with optimism in the future, you may as well spend your money building a bunker and buying cans of baked beans for the end of the world.
Investing without optimism is hard.
It’s hard on your finances and it’s hard on your mental state. If you spend every day poring over headlines of doom and gloom wondering when the next market crash is going to hit, it’s difficult to ever be fully present in the moment.
One of the main changes to my approach to investing in 2021 is the consideration of my values.
While before I was focused on ‘getting it right’ and making sure I was doing everything possible to secure my financial future, my focus over the past year has shifted. Now, I’m much more concerned as to whether I’m investing in line with my values, and whether I’m intentionally contributing to the world I want to see and the future that I want to live in.
https://player.whooshkaa.com/episode?id=815852
– Founder & Lead Analyst
Conviction is earned.
When the you-know-what hits the investing fan (believe me, it does more often than you think), you quickly discover how much you really know about what you own. One of our recommendations fell 40%+ in a single day of trading on news of a regulatory update which affected ~20% of its operations.
We held strong as the shares continued to get whacked again and again. It made us look silly to say “no, we think this fall is overdone — shares are cheap!” Most recently, the company revealed extremely promising news on this matter and shares jumped 30%+ in a single day. They are now on their way back to break even for us.
This is not us patting ourselves on our back (we’re still down on the position overall) but had it not been for our deep research — more than just about anyone we know — we would have panic sold and potentially missed a 30% re-rating. (To be clear, this isn’t the first instance of backing ourselves after bad news — and it won’t be the last).
Conviction and insights are earned through hard work and resolve.
Over to you
So there you have it folks, our team’s biggest investing lessons during 2021!
Now it’s your turn to reflect on what you’ve learnt along your investing journey during the year. If you’re game, we’d love for you to share your investing lessons with us on social media (@RaskAustralia) or within our FB Community.
This article formed part of our 2021 wrap, which includes:
