Before I became a dedicated dividend growth investor, almost ten years ago, wow does time fly, I had my share of successes and failures in the stock market as I was lured by ultra cheap stock prices that could “easily” double my money if it went up only one or two dollars or lured by new trends in healthy foods that would revolutionize the way we consumed certain products or lured by the promise of some new technology that would change the way we communicate and interact with our real world.
This post is dedicated to all the missteps I have taken as a relative newbie to the investing world and I hope it can serve up a cautionary tale to those out there that seek to make the quick buck via risky stocks or otherwise excessively high yielding stocks. Sometimes it’s just better to buy into the boring slow growth, steady dividend payers and hold them over the long haul rather than risk significant funds on unproven technologies or ultra cheap stocks.
Back in 1994, I was reading and seeing on television a lot of news about a small company that promised to revolutionize the manner in which we communicate and interact with our real world. It was to change our own reality by offering us an alternative “virtual” reality. The company, appropriately named, which caught my attention, was Virtual Reality, Inc. To me, the technology and what this company offered was something straight out of science fiction and best of all it was public which meant I could invest my hard earned dollars and potentially profit from this new virtual reality product it was offering. So, on January 10, 1994 I bought 474 shares of VIRT at $1 13/16 for a total investment of $859.13. For those younger readers, stock prices used to be quoted in fractions and not in decimals. For the next several weeks I saw the stock trade back and forth up and down an 1/8 or 1/16 of a point and steadily dropping, dropping and dropping. Of course, I thought to myself that I’d be swimming in cash if the stock simply rose one or two points not realizing that this was a huge percentage increase. I continued to believe in the company, stock and its technology as I bought another 840 shares on March 31, 1994 at $1 ½. If I liked it at $1 13/16 then I must surely love it at $1 ½. This second investment tranche totaled $1,260.00. In total, I was $2,119.13 deep into this mess of a stock that kept going lower and lower and lower. Today, as a result of reverse splits and mergers my VIRT now totals just 131 shares from 1314 at $0.0001 trading under the symbol STLB (Sterling Business Solutions Inc.) with a market value of $0.0131. How’s that for a great investment? I was able to turn over $2,000 into a little more than one penny!!! I told you this post would highlight my missteps.
If there is one silver lining I can take away from this terrible purchase it is the fact that back in 1994 I could see the promise and potential of what virtual reality can be. Sure it’s 23 years later and virtual reality is still not ready for the mainstream, but I do see it coming sooner than later. I guess I was a couple decades too early in buying VIRT. Had I simply bought KO, JNJ, PG, KMB, CL, MMM, AFL, PEP, MCD, BDX, ITW or any other solid dividend paying stock and just held on I’d be in a much better place with my original $2K investment in this stock.
But wait, there’s more… In case you thought that the Virtual Reality investment would turn me off to stock market investing, you’re wrong. In late 1996, I came across another interesting company that promised to change the way in which we consume dairy. Don’t laugh. This is all true. The company, Say Yes Foods, Inc. (MILK) had a proprietary formula for fat free milk, eggnog, sour cream and cheeses that maintained the creamy texture and taste of full fat milks with less lactose, calories and cholesterol of traditional dairy products. This all sounded good to me. After all, these days all you hear about are lactose free dairy products and healthier options touting reduced calories and cholesterol. Again, maybe I was a couple decades too early in investing in these products as on December 9, 1996 I bought 180 shares of Say Yes Foods, Inc. (MILK) at $5 7/16 for a total investment of $978.75. As with my VIRT shares I watched MILK bounce around a bit ultimately dropping lower and lower and lower till one year later I pulled the plug on this stock, which now changed its symbol to SYES, and sold all 180 shares at a price of $2.00 and redeemed $360.00 for a loss of $618.75. The only solace I could take from this transaction was the fact that I was able to get some of my money back instead of watching my total investment potentially evaporate.
The next two losers I’d like to mention I’m not entirely sure of what they even did nor why I was drawn to them in the first place to invest my hard earned cash. First up is a company simply known as JWP Inc. (JWP) which I gathered was a water utility based in Rye Brook, NY that began as the Jamaica Water Supply Company hence the “J” and “W” in JWP and later became nation’s largest computer reseller and the biggest electrical contractor. What??? What kind of company did I just invest my cash with? All that I want to convey at this point is a total loss of $387.50 in JWP as my 100 shares that I bought back in March of 1993 at $3 7/8 eventually went to $0.00.
The final stock purchase on my wall of shame that I’d like to share with you dates back twenty years as on November 17, 1997 I picked up 300 shares of Keystone Energy Services (KESE) at $9 21/32 for a total investment of $2,896.88. By the name alone, I am guessing that KESE is/was a company in the oil and natural (gas) industry. What they did exactly I could not tell you for sure. What I can tell you is that I had to cut my losses on this stock very quickly as on November 26, 1997 I sold all 300 shares of KESE at $6 9/16 realizing a total loss of $928.13. Did you catch that? Almost one grand in losses between November 17 and November 26. Now that’s a fast way to lose money.
In all, my early days of investing saw quite a few missteps and blunders along the way. Of course, it wasn’t all about losses early in my investing career. I did have some winners mixed in and I’ll focus on some of my investment successes in another post but looking back at these trades and the companies I invested my hard earned cash makes me shudder a bit that I even considered these trades in the first place. In total, my losses from these four trades equaled $4,053.50!!! A lot of money today, even more money when you factor in over 20 years of inflation. Wow. As I stated earlier, imagine if I had just bought the well known, boring companies we all love to invest in these days. A lesson learned for me and hopefully for you. The allure of unproven companies, low dollar amount or high yielding stocks usually end belly up.
To all you newbie investors out there, and some of you seasoned players, what’s the one thing you learned about my investing mistakes? Do you have any similar experiences with “stupid” investments? Please share below.
Disclosure: Long KO, JNJ, PG, KMB, CL, MMM, AFL, PEP, MCD, BDX, ITW, STLB
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net
I’ve got some similar error but never with that much money. I turned 500$ into 25$ with some penny stock I tried to surf on the spike like Gevo. Also, I’ve invest in a company (TMD.TO) that I heard from a friend and that looked good but it turned 780$ into 590$ but I still hold it since it’s not a lot of money and they had some management change, But it still a risky investment since their product is not out and even it didn’t start the FDA approval process.
Thanks for sharing your missteps.
Hi TFT,
I guess everyone has a tale to share when it comes to making investing mistakes. It’s all a learning curve and I’m happy that I’m a dedicated dividend growth investor today but I do sometimes wonder what could have been had I simply started out the DGI way. Thank you for sharing your own investing mistakes.
I guess we all wonder if we didn’t do the error we’ve made what it would have been. But in the end, we all do some error before we find the way that work the best.
When I started, I wanted to make the DGI way but I’ve stopped since I heard about some stock that could bring some money faster. That was the error but now, I am back to the DGI way and I guess this time I will stick to it since I saw that other technique are not the best.
The Financial Tech recently posted…Goals for 2017
Hi TFT,
You said it. Sometimes it’s tempting to chase those cheap stocks hoping they will turn a quick profit or buy into ultra high yield stocks. Like you, I have made my mistakes and will never go back to those types of investments. It’s been DGI for me since 2007 and I’m not looking back. DGI for me is here to stay. Thanks for the reply.
Hi Keith,
Before I knew about DGI and investing in “Boring” div stocks, I bought 5000 shares of a company called Veltex Corp at 38 Cents a share back in the late 90’s.
.
Made sports apparel. Hats, and shirts , etc. Prospectus stated they were going to get all the major contracts from the big sports teams to license their brands. Sounded great to me!!!
Well, seems the CEO ran off with all the money in a year, and stock went to .001. Definitely was my worst investment.
Veltex has a website up to this day, and here is whats on the home page:
Mission
Veltex Corporation seeks to enhance shareholder value through aggressive recuperation of lost resources and assets while maximizing the worth of those recovered.
At stake are losses originating from alleged misappropriation, negligence and fraudulent activities of the corporation’s prior management, accounting and legal professionals, among others. Current litigation is underway in federal and in various state courts. Veltex’s litigators are dedicated to the uncompromising, efficient and timely prosecution of our claims.
Live and learn!
Regards,
Jim
Hi Jim,
You said it best, “Live and learn!” It’s painful to recount these investing mistakes and as I mentioned in the post I still cannot believe at how “stupid” I was to even consider investments in these companies. Give me a break… a specially formulated milk? Virtual reality tech from the mid 90s??? I’m not even sure they had a working product. I guess as new investors we all seek that one big score. The penny stock that shoots to $50 or more but more often than not, as with your Veltex Corp, penny stocks tend to drop to sub-penny prices or even zero. It seems like we all need to get our feet wet with some crap first before moving on to the likes of PG, RY, KMB, ITW, MMM, KO and PEP to name a few. Great mission statement by the way from Veltex. Thank you for commenting.
Unfortunate series of events here DH. One positive thing that came out of it was that you were able to learn from your mistakes and it lead you down the path that you are currently on. You didn’t mention in your post but I am curious to know if you looked at the fundamentals of these companies, or did you invest solely on knowing what the company did?
More Dividends recently posted…Recent Buys – Target (TGT) & a little Coca Cola (KO)
Hi MD,
No doubt I learned a lot from these investing mistakes. As I mentioned, it wasn’t all about losses in my early days but these ‘loser’ stocks eventually guided me towards the dividend growth path I am currently on. It was a different era where dividends were not sexy at all as interest rates on bank balances, CDs and other fixed income products were much higher. It was more about finding that diamond in the rough and riding it sky high. After all, who cared about JNJ, MMM, MCD and the like when these new and exciting companies were doing something different even though unproven. To answer your question about fundamentals… in one word, ‘No.’ Besides looking at basic stock information I barely scratched the surface on any figures of these companies. Sales? Cash flow? Value? What was that? If I just looked under the hood, heck, if I just opened the hood, I probably would have seen a financial mess in each of these companies. Thank you for stopping by and commenting.
I have made some terrible buys over my short time investing. Most of these made based on emotions or what I was hearing as the new trends. I sleep much better at night investing in large multinational companies and is also the reason for me starting my own blog. I have definitely been much more controlled in my trades now and have been learning a lot!
-TDM
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Hi TDM,
Emotions can get in the way of even the savviest investor. After all, we are human and as much as we like to suppress our feelings when it comes to investing it can be very hard to squelch certain desires. Like you, I sleep very well at night with my current portfolio. In fact, if I blasted off to Mars and didn’t have access to my accounts for ten years or more I’d be just fine. That says a lot about my confidence in my holdings as well as diversity. It’s all about sharing and learning which is why blogging can be quite powerful as you bare your triumphs and failures so that others may learn. As always, I appreciate your comment.
I feel like in order to really experience investing, one has to have one or more of these moments :). It’s like a right of passage for investors. The trick as we all have figured out is to keep playing the game. If you don’t play, you can’t win.
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Hi DR,
It is definitely a rite of passage. I don’t know anyone that doesn’t have a story or two to share about an investing blunder made over an investing career. The important thing is to learn from these mistakes and chart a course for better long term returns. Of course, for me it means buying dividend stocks exclusively and making sure that I’m investing in “real” companies selling real products with real cash flow. Can’t complain though. These days my portfolio is looking quite healthy and my passive income stream has been growing every year as well. Thank you for sharing your thoughts.
All of us have made mistakes for awhile I was identifying undervalued small caps. Some turned out ok others not so much. Now a small cap if I buy it must pay a dividend. I bought safety kleen and watched them go broke. I bought a mining company and watched them go broke. We all make mistakes
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Hi Doug,
I guess it’s all part of investing. No matter how much you read and learn from others, sometimes you have to make these mistakes yourself in order to really learn a valuable lesson. I know I’m not alone in making these types of investing mistakes. The silver lining from these bad investments is that I’ll never buy those types of stocks again. Thank you for commenting.
Seems like a lot of bad luck and a little bit of unknown. Bad luck on the investments, but at least now you know what yo’re doing. I am new to investing, so i hope the same thing doesn’t happen to me. Thanks
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Hi BHL,
I wouldn’t call it bad luck as much as investing in the unknown. I really wasn’t focused on any fundamental data which if I was would surely steer me away from these companies. I just bought into them because they sounded “sexy” to me and I thought, “Why not?” Since I became a dividend growth investor in 2007 I have not looked back once and will not buy into those types of companies ever again. I am happy with my current portfolio as it allows me to sleep well at night and I have enjoyed nice capital gains and more importantly an increasing passive income stream every year since I began. That’s the real lesson for me. Thank you for sharing your thoughts.
Great post! Thanks for sharing your investing lessons so that others can learn from them. I have my fair share of similar losers as well. In retrospect, it’s hard to imagine what I was thinking! Glad we’ve found an investment approach that works now.
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Hi Jay,
Glad you enjoyed this post. It was a little painful to recount but I hope it can serve as a valuable lesson to others who are starting out, that sometimes it’s just best to stick with the large well known companies, diversify and buy when there’s good value being offered. Of course, investing in any company carries risk but it’s really mitigated when you hold a stable of proven companies selling products or services that we are dependent upon. Thank you for stopping by and commenting.
My friend, the names in my portfolio were different, but the story, thought process, and results were the same! The tech bubble was an expensive lesson for many. Thanks for sharing.
Hi Phil,
I’m sorry that you can relate to some of my bad experiences but in the end I guess it served us a valuable lesson in what to invest going forward. I know I will never buy into any penny stocks nor other unproven company or service that I’m not even sure of what they offer. I appreciate your comment.
it is appreciated that you share losers. People starting need to know that you can losse money, that not all investments will go up…
That is why I posted about a 1000USD loss in options as I was suer the markets would crash… turned out my crystal ball was upside down 😉
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Hi At,
Absolutely. I’m happy to share my winners and losers with our community hoping that others can learn from my mistakes. While there are many great companies and stocks to invest your money there seems to be an even larger pool of, for lack of a better word, ‘crap’ out there. I guess it’s human nature to want to try investing in these cheap stocks or unproven companies with the hope of making one big score but more often than not these investments go bad and become worthless. Thank you for stopping by and commenting.
Always funny looking back and trying to remember what you were thinking when you made those decisions. Makes for a good lesson indeed. Pretty sure we have all had at least one or two bad buys while trying to learn about the market. To a beginner, all you know is buy low and sell high so they tend to gravitate toward those kinds of stocks. While the dividend payers don’t tend to fluctuate in price as much, they are forgotten until you learn about the power of dividend growth. But the market is a long term game and those learning experiences are required to succeed in the end.
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Hi DD,
Looking back, I can honestly say that I had no idea why I even considered these companies over and over again. It’s amazing how one can learn and mature over the years and change a thought process when it comes to investing. Quite frankly, had someone taught me about dividend growth investing from day one I would have gone that route without looking back. In those days I was pretty much on my own trying to figure out what the stock market was all about. Why I chose a VIRT, MILK, JWP and the like over a JNJ, KO or MCD is still beyond me. Sometimes a little guidance can help a lot. In the end, I am a dedicated dividend growth investor since 2007 and I’m not changing my ways. Thank you for commenting.
I have plenty of stupid mistakes, I bought 1 batch of penny stock when I have free trades at AMTD. hihi… needless to say that it wasn’t turning out well.
I bought V at 56$ when it went public, but sold it shortly after LOL 🙂
My mistakes are not holding stocks long enough. I guess, I’m still doing it now after I liquidate my portfolio to buy rental property. Oh well, at least with property, I can’t sell it as I please. LOL 🙂
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Hi Vivianne,
The strong lure of penny stocks. I guess most of us have fallen victim to those types of stocks at some point in our investing career. Unfortunately, I can relate all too well. You bring up another investing mistake many of us make too; selling too early. For now, I am a dedicated dividend growth investor and my hold time for most of my stocks is forever. Of course, I’m not against selling, it will just be a very rare occurrence. As always, I appreciate your comment.
Hi Divhut,
That are some serious losses you had there. I consider myself lucky that I didn’t have such losses. I always went for the really boring stocks. But my first stock that I bought in 2008 was a risky one at that time but currently it is a tenbagger ( including dividends)
Cheers,
DC
Hi DC,
Those losses were not fun to incur but I can take solace in the fact that all that money has come back to me via my current long term winners and, of course, dividend income. You are lucky to not have experienced any heavy realized losses and looking back I wish I had the guidance of someone else to simply point me towards the well known companies most of us currently invest our money. Thank you for sharing your experiences.
First of, congrats on being so open with your readers. I see many bloggers putting their up numbers public, but never show their mistakes… how could this be possible? We all did mistakes and we will probably still lose some in the future. Only difference is that as more experiences investors, it will hurt less (more diversified, more solid and proven companies, growth in terms of future gain and dividend, selling before it’s too late, etc.). I’ve set my 7 Dividend Investing Principles in response to my missteps! 😉
Missteps are good for learning. No shame to have!
Cheers,
Mike
Hi DG,
I’m glad you can appreciate a post like this that highlights some of my lowlights 🙂 As you said, every investor has experienced an investing blunder at some point in their career. Whether or not they decide to share those mistakes is another story. While it was not fun to recount these mistakes I have made and actually tally up my total losses from these loser stocks, it just reminded me of where I came from and how haphazardly I used to invest. Of course, since going the DGI route this is not the case anymore as I carefully look over every stock that I consider for my long term portfolio. Thank you for commenting.
I don’t like focusing on the past so much but it is sometimes necessary just to see how far we’ve come. So yes, good job!
Mike
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Hi DG,
I agree. What was, was. No changing the past. All the past can do is offer up some very important lessons which I gladly learned 🙂 Thanks for the reply.
Yes, those were some blunders, but I bet you learned SO much from those! I always love the expression winners learn from their losses. That’s exactly what you’ve done. That’s awesome. I haven’t had to many “whoops” moments, probably because I only toe into the investing world and stick with the safest stocks I can think of. Don’t worry though, I look forward to those “WHOOPS” moments. ; )
SInce you asked for similiar mistakes, the closest I’ve come is with some of my Oil and Gas stocks. I bought some energy stocks knowing that gas would bounce back, but after I bought them, I immediatly realized I knew nothing about them and only picked them up because other dividend investors had done so. So I sat there as the price slowly sank and I HAD NO IDEA WHY. I barely knew about the company, but I had no idea how they made their money. It was only $300 I think, but that’s alot of money to me. That was one stock that I watched daily and as soon as it came back near my purchase price, I sold it and ran!
I learned some important lessons there like you did with these. Thanks for sharing your “whoops” moments, I know sometime it isn’t easy.
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Hi WS,
No investor on the planet is batting a thousand. That’s just a fact. I guess the important thing to remember from these blunders is not to go down the same path again expecting different results. I know that if I had a little guidance from an “elder” I wouldn’t have put my money in such garbage. These days, with so many resources online, not to mention the dozens and dozens of blogs out there that openly share their own investing winners and losers, there is the hope that new investors won’t make the same mistakes as others have in the past. I hope this post will confirm to other investors that sometimes it’s best to stick with the stodgy, solid, boring, proven, known companies rather than trying to find the next AMZN or MSFT. Down the line most would be better off with those types of stocks instead. Thank you for sharing your thoughts.
ugh!! ESLR ( Evergreen solar) , rode that one all the way to bankruptcy! It happens, you just hope the victories outweigh the losers. Luckily for me I am way in the black over the years. DGI has brought me a new level of discipline that really makes a huge difference in yearly returns. Thanks for sharing.
-Brian
Brian recently posted…Jan 2017 Stock Purchases
Hi Brian,
Been there done that in terms of riding a stock all the way to zero. I like how you stated that DGI has given you a new level of discipline. I can totally relate in that sense as I feel that’s exactly how DGI changed me when it comes to my investment picks. I guess we all have a story or two to share, if not more. What’s life without getting a black eye every now and then? As always, I appreciate your comment.
Me too, I made plenty of mistakes over the last ten years. I had the tendency to focus on high yielding stocks which showed unsustainable dividend payouts in the medium term. Another thing I had to learn was to be quite strict when it comes to the debt ratio. Temporary sluggish growth, restructuring or a market downturn can quickly put enormous pressure on a highly leveraged company.
If I just had bought Coca Cola, Pepsi, Johnson & Johnson and Disney ten years ago for USD 10’000 each and reinvested all dividends I would have been so much better off. But anyway, I enjoy my path as a dividend investor and each experience will serve me well.
Good read, thanks for sharing!
Hi FS,
Like you, eventually I learned my lesson when it came to investing in stocks that are unproven or simply lack the appropriate fundamentals. I also like to play the ‘what if’ game and imagine how much further along my FI journey I’d be if I had simply bought the boring, stable, dividend growth stocks instead. At least we are both on the right path today! Thank you for stopping by and commenting.
Always educational to review your past behavior. Even if it’s not educational, it’s often entertaining!
My biggest investing mistake (so far) was playing with mechanical investing strategies between the last 2 market corrections. Very attractive to a engineer like me, that somehow you could combine an analysis of past performance, financial metrics, and throw in a little voodoo, and presto you have your own stock-based printing press.
I’d much rather have an actual money printing press in the form of regular dividend payments and growth.
You can teach an old dog new tricks….
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Hi Jack,
In long term hindsight I guess these missteps can be viewed as entertaining though, at the time, I remember not being a happy camper seeing these pretty significant losses. In the end, it was all an educational process that led me towards the DGI path. As you stated, it’s much better owning an actual money printing press via dividends rather than trying to come up with some new form, and often unproven method, for getting returns. Thank you for commenting.
Wow, I never knew that stock prices used to be quoted in fractions instead of decimals. Why the hell would that ever be a thing!?
I’ve had a few losers too, despite being a dividend growth investor. SDRL and NOV were players in the oil industry that had good fundamentals until the oil prices collapsed. Despite only servicing the oil industry rather being an oil driller, both companies cut their dividends and saw huge price drops, both of which never recovered.
The only “penny stock” sector I’m looking towards right now is marijuana, mainly because it’s not some new fad or technology but rather something that’s been used since the beginning of time. I feel like, in some alternate universe, marijuana stocks are considered stodgy old blue chips. I can’t imagine that not being a major industry in the next 20 years, vs new technologies where anything can happen. They are the only exceptions to my “no penny stocks” rule.
At least you learned your lessons from these losers. Most people lose money and then complain that the stock market is rigged and that you should put all your money in savings accounts and savings bonds.
Sincerely,
ARB–Angry Retail Banker
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Hi ARB,
It’s a lesson in history as to why stock prices used to quoted in fractions. It actually dates back to the Spanish trading system from the 1600s when whole gold pieces were divided into eight pieces to easier facilitate trade. Apparently, the Spanish only used fingers to count their currency and not thumbs, hence a currency base of eight. When the NYSE first opened it based its own stock trading on the Spanish trading system which is why stock quotes always came in fractions. 1/8 equals 12.5 cents which used to be the minimum amount a stock could change in value. Over time, they added smaller fraction denominations like 1/16, 1/32, 1/64 and even 1/128 to stock quotes to minimize the stock price spread.
Can’t blame yourself too hard over SDRL or NOV. They were solid players in their time as opposed to some of the losers I picked like VIRT or MILK which never had anything going for them from the get go. Thanks for sharing your penny stock holding. While it’s too early for me to consider investing in any of those public marijuana companies they do have the potential to become stodgy, mainstream companies in decades time. I can see that happening.
Of course, all these losers ended up being lessons and clearly it did not shake my confidence in the stock market nor investing. I’m long the market, long my dividend stocks and don’t foresee any event shaking up that confidence. Thank you for stopping by and commenting.
DH,
That read like a personal history. I only started with $1k back in ’10, about 2 years removed from school. Bought some brewery, a vineyard, a tar sands energy company, an aluminum miner, a utility, and solar power company. In all I am still screwed by that tar sands company (PGH) and I sold the solar and aluminum companes for losses. I did well with the vineyard (and still hold it WVVI), as well as selling the brewery (was HOOK now BREW) for $16.5 / share when I bought at $2.5. Those first few stock purchases show greater losses than gains, but it was not all terrible.
Still I learned the same lessons as you, that time is our advantage vs the big stock buyers. Luckily the internet was out there to convey that information.
Thanks for that story,
Gremlin
Dividend Gremlin recently posted…January Review / February Preview, 2017
Hi DG,
It was a very accurate personal history. I just hope that new and old investors can reap some benefit from my real world mistakes. As I mentioned in the post, it wasn’t all bad trades. I’ll highlight some of my winners too before I became a dividend growth investor. Sometimes, time, patience, consistency and not following the trends or what’s hot can save you a lot of pain and aggravation. I think everyone has a few stories that they could share relating to some “stupid” investing choices. As always, I appreciate your comment.
This is the one good thing I like about being able to get my feet wet with Robinhood. I’m learning from my mistakes at very low stakes. My biggest mistake occurred 11 years ago when I got talked into signing up with my employer’s 403b plan. It was a few out and I currently have five figures trapped until I change jobs or turn 59.5. Looking back on it, though at least I started putting some money away for retirement early. Aside from that my mistakes have been minor. I initially knew I wanted to invest in dividends, but didn’t understand the growth aspect. I also didn’t look for value. Some of my initial buys didn’t have a history of raising dividends.I did get taken in by Frontier Communications and their yield. But overall that was less than $60. I’m holding onto it for the time being because of the dividend. But I may sell at some point and just move the money into something more stable.
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Hi DS,
Thanks for sharing some of your own mistakes. Mrs. DivHut, a few years back, was being encouraged to join her employer 403b plan but didn’t buy into it. She said she’s fine with our own dividend investing methods and is happily contributing to our overall portfolio. The good things about your mistakes is that you were able to learn from them with the overall dollars being lost minimal. For me, it’s DGI all the way. In terms of stock investing it’s the only place I’ll put my money for now. Thank you for commenting.
Thanks for sharing your past experience with investing. People who are starting to invest for the first time should find this post insightful. We all make mistakes; the important thing is that we learn from our mistakes, which you did. Nothing like the big boring companies, am I right? But they are a more fool-proof way to build wealth.
Hi ACI,
Big and boring all the way for me. It’s slower, more consistent and a safer way to build long term wealth as well as create an ever increasing passive income stream. There’s no question that I have learned a lot from my early investing mistakes. I will never buy stock in a company that is unproven ever again. I’m glad you enjoyed this post highlighting my mistakes. Time to look ahead! As always, I appreciate your comment.
Hey thanks for sending me to this article!
A person always seems to remember the losses and hopefully learns from them more along the way. Most if not all successful investors are never right all the time.
My biggest blunder was not buying in 2008-2009 while going to college and studying about the markets. I had plenty of cash, no debts and a computer that was willing and able to make any trades. Instead I was in the books and not putting it into practice. Would have done quite well from then to now…..
I also did a full report on a company called Jones Soda. They were the next big thing using natural cane sugar, Cramer was pumping them on his show. They had it all going on so I bought shares at $21 dollars. Still have them now at .50 cents a share and teetering with bankruptcy.
-Cameron
Save Splurge Deny Debt – Cameron recently posted…Why I Left the Financial Advisor Industry
Hi SSDD,
It’s not all about picking winners which is why I wanted you to read this post. I bought some really stupid stocks before I became a dividend growth investor but as you said, losses can become learning experiences. These days, there is zero chance I’ll ever buy into a new or unproven company/stock. Your comment also reminds me that it’s important to be consistent with your investments. During 2008/09 I continued to buy every month as I have been doing since I went the DGI route. I think the lesson there is to never time the market and just keep buying the best relative value you see.
I remember Jones Soda too. They used to be in the market but I haven’t seen them in a while. Didn’t know they are still around. Sorry about that loss with the stock. At that current price I’d just hang on for fun. Thank you for sharing some of your experiences.
Thanks for sharing Keith, it’s a good thing you made those mistakes – imagine if you had made money and decided that’s the way to invest forever?
We’re always learning and that’s an important part of the process and we’ll be trying to take on a more guaranteed type of investing as we go and experience more.
Tristan
Dividends Down Under recently posted…Dividend update: February 2017
Hi DDU,
Always happy to share my triumphs as well as defeats in the investing arena. Of course, all these trades were made before I became a dedicated dividend growth investor which is the only path I’m on these days. Valuable lessons were learned from those painful trades and I’m happy that those types of risky investments are in my past. Learn from the past and focus on the future. Thank you for stopping by and commenting.