On 30th March 2023, I opened a brokerage account and purchased my first share of stock. I was filled with enthusiasm when I clicked the buy button.
With limited knowledge at the start, mistakes were made as every beginner investor does. Today officially marked my first investing anniversary and I would like to share my strategy and what I learned along the way.
Buy Only Dividend Stocks
My current portfolio consists of 29 stocks and all are dividend-paying stocks. This is the strategy I decided when I started venturing into the stock market.
I know, dividend stocks are boring but I still loved collecting some extra income for reinvestment and seeing my total returns increasing in the long run.
Contribute $250(SGD) Weekly For Stock New Purchase
Consistency is one of the keys to successful investing. I made it a point to contribute $250(SGD) weekly for new stock purchases. I am glad I have been maintaining this from day 1.
On and off, I will contribute more when I receive a higher income with my full-time job.
My Current Portfolio
For full transparency, this is my current portfolio consists of 29 stocks. The stock quantity may be a bit too many for others but sometimes great companies share price come at a premium. We have to spread our fishing net to look for other opportunities.
As you can see from my portfolio, I am pretty happy with my investing results. I see gains in almost 80% of my portfolio while my biggest losses are Nike(NKE), Realty Income(O), and Starbucks(SBUX).
I will stick to my current portfolio for now and have no intention to sell. I sold a few stocks in the past for different reasons. Losing confidence in the company’s growth or needing new capital for other stock investments. Some I sold at a loss while some I sold at a profit.
All these are a learning process. When you dive into the stock, the most common mistake is we don’t know what we are doing.
Invest Without Any Research
Impulse buying is a common mistake beginner investors make. Regardless of where you get the information from, either YouTube, a website or any financial information site, there is no research done on the company and purchased the stock for its high dividend or dividend yield.
Probably this is a matter of how rather than why. We know we need to understand the company better but we don’t know how as a beginner.
I can go on and on the investing mistakes but just one is enough as I feel this is the most important one for investing.
We need to know what we are buying. We are not just buying a share of stock, we are buying a piece of business. Learn how to research, stats to look for and reading news on the company.
After one year of investing, this is what I use now to understand a company’s financial ratio.
This is a self-created Google sheet. I am not a formula guy, I take inspiration from other investors and fine-tune the stats to my liking.
My Transformation
I am proud to say I am a better investor compared to one year ago as a rookie investor. I understand how to find better companies to invest in, research how the company made money, read (basic) financial statements and track data on how the company is doing financially.
But I will still make mistakes. Mistakes are part of our learning process. It reminds us we need to stay vigilant, stick to our investing strategy, be patient and aim for long-term goals.
This is a journey I enjoyed so far and will keep on enjoying down the road.
Thanks for reading and KEEP ON INVESTING!
