What I learnt from investing in the stock market in last two years!

I am going to complete two years of my investment journey. By investment, I mean investment in stock, mutual fund (MF), bond. I started investment in January 2021 and then there was a massive uprun till October 2021 and then the market fell and since then Market is moving sideways. I diversified my portfolio in stock, MF, Bond and Gold with very high exposure in stock and MF.

In this last two years, I learnt a lot about investing, although there is no end of it. At present my portfolio is in red. The reason I learnt many lessons about stock investment  because I remain invested when market went down or up and did not sell anything. Btw, I am writing here from an individual investor’s viewpoint. I initially started with very diversified portfolio. In the downside, it is bad as you need to look after many things, and I realized that very diversified portfolio is bad for an individual investor.  In the upside, I got to learn a lot from these stocks price movement. As I had a wide variety of stocks, I learnt about growth, value and dividend stocks. Now, as a retail investor, who has different profession, what should be the way investment? Here are some of the lessons that I learnt:

1. Patience is very important. It is very difficult to control your emotion when you see your portfolio in red. That is the biggest challenge. Don’t panic and don’t sell, at least when market is down.
2. Go for quality stocks priced at fairly value. As a retail investor with a day job, it is better to pick such a stock where you can “buy and forget”
3. Do not have FOMO and Greed. Better have financial goals and invest for that in disciplined manner.
4. When market moves up, we want to invest more. When market goes down, we become fearful. It should be opposite.
5. Asset allocation is the key. I have not done it yet. I realized that is the most important thing and that takes into account global macros and market volatility.  That is my goal to do.
6. Timing is important but impossible to do, hence should be avoided at any cost. Better, have some money in liquid fund to be deployed when market goes down heavily. There will be few days in a year when market may fall severely. That is the opportunity to buy with bit big amount.
7. Take advice and be conservative. You won’t learn properly until you do. Advice of people (genuine people/influencers) should be considered to match with your own learning.