Lots of volatility and new situations = lots of investing mistakes. The mistakes I’m about to describe cost me the opportunity to make more money:
- Selling without having another investment to put the money on
I sold Nike in August 2020 due to what I consider bad management (debt and buybacks), despite their great performance. But I had nowhere to put the cash, so I ended up ~7 months with it stopped. Adding it to the cash I already had stopped, this meant I spent most of 2020 with 50% cash.
- Converting EUR to USD before the opportunity to buy came
When markets tanked in March, I started piling cash and converting to USD because some of my holdings were US companies and they were approaching buying levels. But that price never came, and I ended up stuck with USD for ~9 months without opportunities. Had I never converted, I’d be indexing for all that time and/or investing in European companies. I limited my options for no reason and ended up with lots of stopped money.
- Old price anchoring
Also in March, I had the opportunity to buy some companies at what I today consider good prices. This happened because I didn’t recheck the buy price of those companies, so I was waiting for an outdated price.
You are bound to make mistakes, even when you think you won’t as at one point I thought. Better for you to be aware of it and don’t make mistakes that will cost you more than you can handle!