Time in 2020 feels weird. Some days seem to pass very slowly while some weeks fly by. Looking back, here are 3 things I wish I knew.
How time flies! As I come closer to the end of my second year investing in the stock market, I look back and see how much I have achieved since I started investing in January 2019. Here are the top three things I wish I can tell my younger self (how I wish I can turn back time).
- Investing Earlier
Even though I started investing at the age of 24, I wish I would start out sooner. It is never too late to start anything new at all, but one has to take solid steps and plan towards it. Quoting Albert Einstein, compounding interest is truly the eighth wonder of the world. Despite having a fair amount of exposure to business and investing books such as Rich Dad Poor Dad since young, and reading about the success stories of well-known investors such as Warren Buffett, there was a lack of action from my end. I was an avid saver, but that did not suffice. With interest rates falling over thirty years, interest income can never be the same as it was before. It doesn’t matter how much you start with, as the power of having time on your side just isn’t the same.
- Growth ≠ Linear
I remember vividly upon purchasing my first share (ASX:NAB), all I wanted was the share price to sky rocket after it falling enough to fulfil my trade order. This is absurd and ridiculous. Just like almost everything else in life, we expect linear growth and progression. Be it in education or in terms of career progression, it must be better and greater than before. The share price of the company that you invest in might keep falling momentarily, or it could even stay stagnant for some time. I understand the frustration and setbacks, and that is why you have to first understand your thesis or theory in deciding to invest in the company. Investment returns are not linear, and it is perfectly fine.
- Managing Emotions
Emotional intelligence or EQ is the ability to understand and manage your own emotions. In the world of investing, you don’t always have to be the smartest guy in the room by knowing how to run sophisticated algorithm softwares and modelling ideas. Having a high level of EQ keeps you humble and lowers your ego. It helps you to stay true to your value and strategy, especially when the market is at a pullback or facing high levels of volatility. Practicing high level of EQ also avoid investing biases and impulsive decision making, which are often the main leading causes of poor performances.