My investing journey: mistakes I wish I never made
How to retire THOUSANDS of dollars richer
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Happy Monday!
Let’s start the week off strong.
👉 Indexes are rallying: The S&P 500 is trading at levels not seen since March 2022.
👉 Inflation outlook is down: The 1-year and 5-year inflation outlooks continue to fall
👉 My story: Mistakes I wished I never made in the stock market that cost me thousands
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Weekly Market Update 🗒️💡
Indexes
All 3 major indexes finished the week in the green.
The S&P 500 rose 0.41% and the Dow gained 0.36%, while the Nasdaq led the way at 0.45%.
The S&P 500 posted its highest close of the year last week but didn’t exceed that point until Friday. The index is now up ~20% on the year and is trading at levels we haven’t seen since March 2022.
My take: the S&P 500 is due for a pullback after this run. I’ve been loading up my cash position going into 2024 and will be ready to jump on a dip.
Jobs report
The jobs report continues to scream that we are NOT headed for a recession.
Unemployment fell to 3.7% in November, down from 3.9% in October, however, this number was expected to remain the same.
The combination of falling inflation and a rise in consumer sentiment all show signs of a “soft landing”, as noted by Chief Investment Strategist Michael Arone.
The Fed
Investors need to be careful what they wish for when it comes to the Fed bringing down interest rates in 2024.
Larry Jeddeloh of TIS Group mentioned that “Historically, the price action in stocks after the first rate cut is not positive” and that “The signal that first cut sends is a slowdown/recession is underway and all too often, the Fed has been too late and too data-driven to anticipate that downturn.”
Inflation
As mentioned above, inflation expectations are falling.
The 1-year inflation outlook fell to 3.1%, down from 4.5% in November.
The 5-year inflation outlook fell to 2.8% from 3.2% over the same period.
It’s beginning to look like there are some clearer skies ahead.
My Story
I hope you can find some inspiration in this newsletter.
I started investing at 18 years old…
Here’s my story.
From a very young age, I had always been fascinated with money.
I always knew I wanted a lot of it, I just didn’t know how.
Fortunately, my parents were always open to speaking about money which is an advantage when you’re just a child.
They constantly preached buying assets and doing it for a long period of time.
Although not specifying which type of assets, I knew both of my parents owned a lot of shares in the Financial sector, which they always referred to as their “cash cows”.
Being a part of these conversations from a young age made me want to do it myself.
So at at age of 17, I started buying books and listening to YouTube videos about investing and personal finance.
I thought it was so cool that anyone off the street could become a part owner in some of the biggest corporations in the world.
After months of learning about the market, I opened an investing account the day I turned 18.
For me being able to open an investing account was just as exciting as turning 16 and being able to drive.
I was ecstatic.
My First Mistake
The first investment I ever made was 3 shares of Scotiabank stock BNS 0.00%↑ which I still hold to this day.
The total investment was about $150 at the time and I remember checking the market and Scotiabank’s stock price every single hour of every day for 3 weeks straight.
It was unhealthy.
I was so scared of losing my $150, which was a lot of money for me at the time.
This was my first mistake. Looking at the markets every day gave me the false confidence of thinking I could read charts and that “day trading” wasn’t that hard.
So my next investment was in penny stocks…
And what a tragedy that was…
My thinking was that my Scotiabank investment would grow very slowly because I only owned 3 shares, but if I could buy a stock and own 1,000 shares, the stock price only needs to go up a bit and I could make much more money.
Oh boy was I wrong.
Buying penny stocks only increased my stress levels.
And the worst part was that not one of them went up in price.
Penny stocks are cheap for a reason.
After 1 full calendar year of trying to get rich quick, I had enough and started looking for another way.
Dividend/Index Fund Investing
Back to the drawing board I went…
At 19-20 years old I started reading personal finance/investing books.
The first one I ever read was “The Psychology of Money” by Morgan Housel.
If you haven’t read this book I strongly urge you to.
It changed my entire mindset from “get rich quick” to “get rich for sure.”
Long-term investing in high-quality dividend-paying companies and index funds became my focus.