There is an investing adage: “You either learn a lesson or make a profit; never both”. I have found this to be true for a better part of my investing years, but as I gain more experience, I am trying to reflect and learn lessons from all my trades – from both winners and losers.
This bull market in stocks has been ongoing for a decade and most investors have forgotten what it is like to lose money and come to witness heart-stopping moments when you suddenly see your envisioned future disappear. I first started investing in individual stocks in 2008, just before the Global Financial Crisis and that was a great teacher. I try to remember the lessons I learned back then and continue to learn new ones everyday. Over the last couple of years, I decided to move a big portion of my portfolio into the precious metals and mining sector as I saw more value and the sector was hated by many. My reasoning is fairly simple: when the markets crash (and they will), most investors will seek safe havens, and there is no better safe haven than gold. There are a few other reasons, but that is the big one.
Over the last few quarters, I have been finding so many interesting prospects for investing in the sector, that I have overshot my initial target. The sector now makes 1/2 of my overall investing portfolio. Even with a few sales over the last few months, I have been hovering close to the 50% mark due to good returns. And the bull market in gold/silver mining stocks is just getting started!
While I look over the overall portfolio composition, I am being reminded of a lot of investing lessons from each trade. So, I decided that I will share some of these thoughts (including some random observations) here. Hopefully you will find the thoughts valuable & interesting.