Regret is a funny thing. We’ve all had it. Sometimes, it haunts us. Sometimes, it helps us. When it comes to investing, how you deal with regret plays an important role in determining your future investment choices.
I’m not going to throw myself in front of a moving train for making a few bad investment choices, but I do take a walk down (bad) memory lane once in a while. In fact, I’ll do it again, here.
Back in 2001, I decided to join the ranks of stock investors. It was an exciting time. The economy was doing well, and I had a bit of money to invest. I took a relatively small risk with an $1,100 investment, and I was anxious to invest in Apple. I was (and still am) a Mac head. I knew a lot about the company, and planned to be a long-term investor. I dove in just after the first iPod came out, and the stock price hovered around $24/share. There were few lackluster years with minor ups and downs, but generally, no significant moves in the stock price.
In 2004, I still owned the stock, and for the most part, I had forgotten about it, until Apple began its steady climb, and was having incredible gains. There was a point when I was checking my stock 10 times per day, on average.
Fear set in. Relatives were warning me to sell. I saw the stock rise to $81/share. Then in 2005, the stock had a 2 for 1 split, which meant that for each share of Apple owned before the split, shareholders would then own two shares.
Yippee! I said to myself. I watched the stock rise again to $66/share, and my euphoria was quickly replaced by panic. For some reason, I had a sinking feeling that the stock would take a nosedive (which was not based on any sort of rational thinking), so when the panic became unbearable, I sold the stock (all shares), and walked away with a fairly decent profit. I don’t need to tell you that the stock eventually topped $700/share, once the almighty iPhone entered the market.
Regrets? Sure. Did I learn from this experience? Absolutely. In fact, I believe that I am a better investor as a result. I may not be able to get back the opportunity that I lost with this investment, but I’ve learned that good investment opportunities have a way of coming around again, if you choose wisely. And really, did I lose any money? No regrets about that.