I have done enough trading in the stock market to do justice to a post about my first mistake in investing. The lesson learned is: "Always give a stock due diligence in research before buying."
My first ever stock purchase was of Rogers Communications Inc. My reasoning was the following: Rogers is always first out with the hottest new cell phones (iPhone, etc.), they treat their customers well, and give them free stuff every so often, their customer support isn't out-sourced (at least at the time it wasn't), they have the best network coverage in Canada, and the wireless industry in general is booming. Higher demands on wireless data transfer is necessitating further development of the wireless infrastructure. This might make sense from a general perspective, but I didn't do any fundamental analysis, technical analysis, or even cursory analysis of the stock.
I just so happened to buy the stock at a good time, and the price went up about 12% over a few months. Then in October, their Q3 financial report came out, people didn't like what they saw, sold their shares and Rogers Comm. Inc. went down about 11% in three days. I decided to sell because I was back down to almost $0 gain, and needed the money anyway.
A second example of my mistake was investing in Alamos Gold Inc. I had noticed that over the years and months before now, Alamos had gone up, up, up in price. I thought, if I jumped on now, it'll just keep on going. Lesson number two: "Don't base an investment decision on past performance." Alamos went down about 10% from when I bought it, and I decided to sell before it got worse. It was a good thing I did.
I had read these two lessons before investing anything, but apparently had to learn them the hard way. At least I'm learning from my mistakes, and I did take one lesson to heart without having to learn the hard way: "If things look bad, get out before it gets worse."
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