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Colour Berry
JLM Photography. / Foter.com / CC BY-NC-ND

No one is perfect and no one can predict the future, so that means that you are going to lose some money at some point. Diversification and knowing your risk tolerance can lessen the blow, but it’ll still happen. This is just a fact of investing. My biggest investing mistake to date was buying RIM (now called BlackBerry, ticker: BB) at $28.67. About a year and a half ago I received an extra $1,300 cash that I wasn’t expecting, so I deciding to go gambling on RIM. I bought 46 shares at $28.67 per share. At the time RIM had already come down a significant portion and it looked really cheap to my eyes. Flash forward and I’ve lost a little more than 50% to date!

This was just a case of me being greedy and not sticking to the plan. Everyone was freaking out about RIM, and I thought now might be a good time to buy. I generally get excited when everyone is selling. It also helps that I am young and I’m in the accumulation stage of my investing journey. Anyways RIM continued to plummet and now here I am. I still hold the shares in my account, and I haven’t fully decided what I’m going to do with them. For the time being I keep them there as a personal reminder to follow my strategy. This has been the only time I haven’t followed my investing strategy, and it cost me. It’s taken some time, but I’ve now gotten over it and chalked it up to a learning lesson.

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Going forward I expect that there will be more ups and downs, but at least when the markets are down I still get paid a dividend. This is why my strategy of dividend growth investing appeals to me. I don’t have to worry so much about the stock price when I’m getting an increasing flow of dividends. By carefully selecting companies with sustainable growing dividends and long histories of dividend payments you can sleep easier. If the price drops 10-20% I don’t worry so much. I plan to use dividend income as a significant source of my retirement income, so I’m more concerned with a dividend cut as opposed to the actual stock price. If the price drops 10-20% I view it as a buying opportunity.

What about you, what has been your biggest investing mistake and what did you learn from it?

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One Comment

  1. Buying non-dividend paying stocks.
    You did better than me, I got a goose egg for my efforts to buy Canadian. SR Telecom and Nortel. Well I can’t really say I didn’t get anything as I got to declare a loss against my gains.
    I do get worried at times as I am basically 100% invested in stocks. So I got to see my portfolios drop in 2008-2009. But they kept on paying dividends.

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