J&M Investing mistakes

When we looked at what we achieved today, especially this year, we made good money.

Before we came to this stage, we actually paid a lot of tuition fees to learn about the market; lost money in trading and along the way learn about trading vs investing, as well as some life experiences.

There are investing mistakes we could have avoided and not losing money. But, these are the mistakes we made and we will remember forever in order not to repeat again. We think it is alright to lose money, but not okay to lose confidence. Losing confidence is the worst thing can happen as this will affect our judgement and action towards investing decision in the future. Losing confidence might cause us not having the chance to see ourselves moving into a successful financial journey.

What had we done so badly in the past that we have to remember not to repeat again?

1. No knowing what we invest or speculate

Before we invest or speculate in a stocks, it is important to find out about the company's background and work out the investing capital. This is to reduce the risk of failed investment and capital protection. If we are lazy to do this simple homework, why not we just spend the money or donate to the needy.

2. No exit plan when we have paper profit

Very often when we see paper profit in our portfolio, our greed kicked in and made us thought we will never lose money. When we are not cautious about the risk we are facing or not alert about protecting our profit, it is the most dangerous time as the winnings could turn sour.

3. Invest in the stocks we previously made money

Never fall in love with our investment especially with those we had made money previously! Because of the decision we made, picking the right stock at the right time, we might have the thought of we could made money again with the same stocks. No doubt, we might made money again. But sometimes it might not be the case. When the trend is over, jumping into the stocks we previously made money could made us lose more than what we made.

4. Jump into the market because afraid to lose the trade

It is not difficult to made small money, but big profit? It requires hard work, patience, timing and a bit of luck. Just because we afraid of missing the chance to make money and jump into the market; chances are we will lose money...

5. Invest or trade with correct mindset

Correct mindset is necessary when we are trading or investing. Sometimes we mixed up between trading and investing and therefore we could be very headache when market is against us. Trading usually is a short time frame; if we are at a wrong position, we need to cut our losses in order to protect our capital. Investing is a longer time frame and we need to handle the volatility before we see the result. If we don't have the correct mindset, our decision and action can put our capital in a dangerous position.

6. No emotional trading or investing

Emotional came in normally when we see the market is in our favour, but we did not act according to our plan. Just like Blackmores, if we don't calm ourselves and rush in to buy the shares at any price anytime, we wouldn't know when is the trend over.

7. Following tips

With our networking, it is possible to get investing tips anytime. BUT, how many tips can we follow and how accurate are there? By the time it reached us, is that the beginning or the end of the trend? It is no harm to follow the tips, provided we do our own research.

Conclusion: These are the investing mistakes J&M did in the past. These can be the common mistakes most investors made too. It is not a big deal, but if recognising them can help us improve ourselves and our financial situation, why not?

Blackmores Ltd

We always stay in touch with the market and pay attention to the potential upside stocks. Before we pull the trigger to invest in them, we will do a thorough research about the company background and decide when to buy by looking at the technical chart.

Of course, we do not always invest on all the research we did.

We couldn't remember what was the reason we didn't pull the trigger on Blackmores Ltd (AU: BKL), an Australian company specialize in manufacturing vitamin and natural health products.

At that time of research, the share price of Blackmores Ltd was trading at $30; if not mistaken, it should be in the year of 2014. When we looked at the share price yesterday, we were shocked to find that the stocks was at $185! 500 percent increment from the price we last saw! 

Well, these are the things will happen along the investing journey! Sometimes, we might missed the chances of making big money, just like Blackmores Ltd! Sometimes we might just pocket small profit before the big uptrend happens! Or, we might be too late to join the bandwagon; as soon as we invested, the trend turnaround.

That's why we have our J&M investing rules- no emotional trading or investing, never chase a stock we've missed without doing homework, never fall in love with your investment, never look back on a stocks we've sold, never consider to invest in the stocks we had previously made money...

We always believe if we missed this opportunity, there will always be a better one coming soon. We believe there will always be a right stock at the right time bring us a big fat profit. Have we meet the right stock at the right time yet? Yes, we did! And we believe there is more to come in the future.

Apex Equity Holdings Bhd

One of J&M investing rules is, invest in the business and company we know and familiar with. This is one of the way to reduce the risk of failed investment and capital protection.

Investing in the stock market is not a get rich quick game. It requires vision, patience and holding power. Invest in stocks is like running a business. You need time to build and expand the business; plus a good management team to do the work.

Instead of running the business on our own; our job at J&M is to spend time and effort to look for quality business at attractive price with good management team to work for us. Therefore, we invest in company who offer good dividend payout and the potential for business expansion.

Since we are in the finance industry, we love Stock Exchange, stock broking, securities and investment firms. We sold our shares in Apex Equity Holdings Bhd (MY: 5088), including dividend payout and capital appreciation, the return is 33 percent within a year. For a volatile market like this year, we are happy with such a return.