How To Seize The Day With Investing

It pays to look back at your mistakes to see if something has constantly led you astray from the better path. Although I’ve made several mistakes on my financial journey, I have to say that missing the day has taught me the most. It’s one thing to spot trends and have ideas on how to capitalize on those trends, but it’s quite another to implement them.

You may have heard that you should measure three times and cut once, but I’ve questioned my decision-making dozens of times and convinced myself not to take calculated risks that would have resulted in significant gains. Despite the market devastation that followed the bursting of the dot-com bubble in 2000 and 2001, I knew there were certain stocks that would continue to thrive as the Internet became a more important part of our lives. While comfortably depositing money into my 401(k) account, I was reluctant to scrape together some cash and buy the stocks I was convinced of outside of my retirement plan. Unfortunately, I missed this moment and missed one of the biggest bull markets in the technology sector.

Plan to seize the opportunity. One thing I’ve learned from not taking risks is making sure I have the means to achieve my goals. In this case, it would have meant saving beyond my emergency fund and retirement savings. At the time of this opportunity I had just bought my first home and my remaining savings were needed for my emergency fund. I had hit the top of my financial list in my young career, but I learned I needed to be more aware of my stretch goals. If I had a clearer understanding of the goals beyond my home and security, I would have set up a budget line to save and sacrifice a little fun to have the investment dollars.

I also had to have confidence in my research. At the time, I wasn’t willing to take that risk because I really didn’t dare. I was afraid of failure, but I had to accept that failure was possible and be willing to take calculated risks.

Prepare in case of failure. One thing I’m glad I didn’t do was invest my emergency fund or borrow money to invest. It would be several years before I could reap the benefits of the investment, and I probably would have needed the money in the meantime.

It’s easy to glorify the one who got away. I see that with cryptocurrency. I’ve heard many people say that they would have gotten rich if they had only bought bitcoin when it was a few thousand dollars.

They neglect the wild swings to the downside that drove people out of the digital currency. They also overlook the fact that there were major security issues with crypto in the beginning. It’s easy to assume they would have weathered the volatility, but many people couldn’t take it or lost their coins. Be sure to protect the core of your financial plan in case things don’t go as planned.

Don’t overcompensate. I had to resist the urge to try to overcompensate for my earlier indecisiveness by taking wild risks. We can sometimes overcorrect and pursue the next opportunity without doing the due diligence, which can end up driving you down a deeper hole. The next big market downturn, to me, was more focused on financial services and real estate and worked a little differently than the dot-com bubble. I had to reconsider where the possibilities were in this case.

Learn from your past mistakes. I eventually learned from that lesson and took some calculated risks and experienced some investing success in future market downturns. Instead of just beating myself up for missing an opportunity, I made an effort to prepare better. If you are concerned about missing out (FOMO), go beyond yourself and analyze what caused you to miss out, prepare for the downside and make the right decision for the current environment.