There is a quote which was stuck in my mind since a long time – “Learn from the mistakes of others. You can’t live long enough to make them all yourself.” So what can an investor to learn from this?
Investing is all about risk and returns. Some kind of investments give you higher returns but come with higher risk while some give you lower returns and come with lower risk.
I have a real life story to share with you. A friend of mine was very much fascinated by the stock market movements in the year 2007 and one fine day decided to start trading in the stock markets. He applied for his pan card first opened a bank a/c, DEMAT a/c and a trading a/c and was all set to go. On the first day of his trade he made a Rs 1000/- profit and was all excited, the second day he made a Rs 5000/- intraday profit and kept on making some profits the whole week. He managed to earn around Rs 30,000/- in 10 trading sessions! He now wanted to become a millionaire and started trading in options along with cash trading. He went mad in the greed for money and started to loose his wealth eventually…
Reason why he lost his wealth: He became greedy for money and started over-trading! He was earlier advised by his parents about this but he gave deaf ears to them.
An investor should always discuss matters before he takes a decision to invest and research in all the possible angles before investing! It’s always advisable to learn from the people who have lost money in the stock markets as they can advice you what not to do to make money!
In the above case my friend has thought you’ll a lesson of how not to get into over-trading and why you should not be too greedy!
Do you have a similar story to share? Comment and share your thoughts!