Of what use is money in the hand of a fool, since he has no desire to get wisdom. Proverbs 17:16
If you want to learn how to handle money well you have to be willing to learn from your mistakes. If you want to do it without losing a lot of money, you have to be willing to learn from the mistakes of others. This what I’m here for. I’ll try to share the stupid stuff I’ve done with you so that you don’t have to do the same things. On the other side of that coin you also need to learn from the things you’ve done right so that you know why it was right and how to repeat that success. Again, it’s also great to learn from the success of others so you can easily repeat it.
This week I made a mistake in my investing, that I hadn’t really considered before. I have been using Tradeking as my online broker for a couple of years, but I was thinking about changing brokers. I decided to open an account with Interactive Brokers and started an account transfer this week.
Everything sounds fine so far right? Well, a few of my stocks reported their earnings this week. One of them didn’t have a very good report, and I was seriously considering selling it while I had a small gain. Things changed quite a bit, and I’m just not sure if I’m as confident in the future as I was before the report. Now for the problem. When in the middle of a transfer you can’t trade on the account. It was down about 5% right after the report. Since then it is down 15%.
The lesson from all this is don’t make changes when the potential for big news exists with your stocks. Obviously you can’t foresee everything, but you do know when a company is reporting earnings. Earnings season is probably the most volatile time for stocks. I felt so helpless this week as I wanted to make a change to my portfolio and couldn’t.
This is really just a small thing, but the point is to always learn from your mistakes and the mistakes of others. If you don’t learn from your mistakes you will not succeed financially. Remember, a fool and his money are soon parted. Learn as much as you can from as many different people as you can.