These are the investing lessons I learned in 2015 based on my investments and trades. Hope you find them useful.
2015 turned out to be a year of big nothing. Most markets worldwide ended up flat, many sideways, and a few had a brutal fall. 2015 shattered the hopes of most professional investors worldwide. 2016 can be an extension of 2015, at least for the first half.
As we close out another successful year at InvestingFunda, here are my personal lessons from this year. Hope you find them useful.
- Investing on hope doesn’t work – eventually investors get tired and bail out. Indian stock market in 2015 was the classic example. The market had done very well in 2014 after Modi came to power with a huge majority. Investors including FIIs pumped in money HOPING for a quick turnaround. However, when that didn’t happen in 2015, investors started bailing out. The markets caught up with the reality.
- Follow the crowd at your own risk – Indian investors pumped in a huge amount of money into stocks. The number of new brokerage accounts opened broke all records. However, had you invested along with them, you would be staring at negative returns this year.
- Path to recovery can be long – US markets hit record highs in 2000. Since then, it took 15 long years to break the records set in 2000. It was a long grind. Invest in stocks only if you have a long horizon.
- There are years when no investment is a good investment – 2015 was a year like that. Stocks, bonds, precious metals, oil, real estate (some areas) didn’t really do great. Some lost money.
No matter what the stock market does, there always are great opportunities for investors who know what to look for. Stock picking never gets out of date (except in raging bull markets). Learn to pick great stocks, learn to identify value and you are good to do.
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