Like most of you I lost a large chunk of my savings in the financial crisis of 2008-2009. During that period I was working hard to get my master degree in Biomolecular sciences. As most people I watched a lot of messages pass by on the news about the stock market and how deep it was going. Those messages never got trough to me as I didn't care because I didn't see the relevance to my own life. It was beyond my world! My good old father took care of my money and I didn't have to worry about anything!
One day it hit me like baseball bat:
I got a letter from my good old trusted bank. It showed the variance on the value of my saving accounts. Surprisingly I saw a large part of my money was evaporated. How did this happen? How did they lose my money? Well,... a large chunk of my savings was invested in a 'defensive' fund, but nevertheless value plummeted. In a moment of panic I called my bank. They told me I should just wait and sweat this one out and not to worry. Going up and down is all stock markets are doing. I started following, not really understanding the dynamics of the stock market.
Then the bug bit me:
Opportunity hit me as I watched the market recover in 2010. Watching industrial stocks rise 500% above their bottom in 2009 was a real eye opener. After my master in molecular sciences, I did an MBA in management in 2010. During this studies I had courses in basic accounting and macro economics. Bit by bit the economic puzzle was getting more clear in my head. Accompanied with a lot of reading I started to get some "fingerspitzengefühl" in the fundamentals.
The final push:
Making the switch from letting your money rest in peace on your bank account to actively managing your money is a big step. The final push came in 2011 when stock markets crashed as the European dept crisis started. It remembered me that stocks can rise as much as 500% after crashes and I first pressed the buy button!
My investement strategy:
1.40 % in businesses that are reasonably priced and have very stable income/dividend.
2.30% in businesses that are priced well below their intrinsic value (Buffet style)