I didn’t start out being a good investor. I’ve probably made every kind of investing mistake you can make.
At first I thought I was smarter than the market, that I had a natural ability to make predictions and watch the money pile in. I was young, long-term meant next week, and the more complicated the idea the more I thought I would make. After losing what was a large amount of money for me at the time, I realized I had no special ability to predict markets. I was just like everybody else. But I still believed other “experts” did have the magic touch, so I started looking.
I signed up for lots of newsletters and read almost every article & blog about investing I could find. I was convinced that even though I didn’t know what was going on, maybe someone else out there did. So in my early to mid-twenties I too became an “expert” at reading charts, I read all the financial news and analyst reports I could get my eyes on, and all sorts of wacky market stuff started to seep in (the funnier ones: the Fed/government controls the market, the market is efficient, the ratio of Dow Jones to gold can predict trends, analyst recommendations are honest opinions). Well, not only did I find myself overwhelmed, but these things also turned out to be wrong. Regardless of a high cost newsletter or free online blogs, the results were the same as before… bad.
That’s when I said to myself, “Enough is enough. You can’t go on losing your hard earned money. All of that destructive behaviour stops now.”
So I made a commitment to re-learn how to invest, and learn only from the best. I found out that if you’re patient enough to read the whole collection, Warren Buffett’s shareholders letters are really an instruction manual on how to generate sustained growth through investment. For the scholarly, there are plenty of academic journals that describe in detail the techniques of proven investment strategies. It’s safe to say that by cutting out all the garbage, I finally started to get a handle on things.
Yes, I’ll likely make some more mistakes going forward, but probably not as many as I’ve made in the past, and they’ll certainly be smaller too. Every path has its puddle. Sometimes you don’t know what worse luck your bad luck saves you from.
So this Thanksgiving weekend, I’m thankful for the mistakes I’ve made that didn’t crush me, but helped me learn and move my purpose forward. I’m thankful for luck and hard work cooperating for me hand-in-hand. And I’m thankful for the support of the people around me who watch it unfold.
Ben Kizemchuk is a Portfolio Manager & Investment Advisor with Altus Securities Inc. in Toronto. He offers financial planning and investment management for high net worth Canadian investors. Ben focuses on high quality investments, the Growth and Income Portfolios, low risk investing, and reducing tax.