Take a good look at the above picture! Notice the date, Sept 24/80 and the price of silver was $24.20 per ounce. Look at the exchange rate between the Canadian and U.S. dollar (1.1685). That was the first investment that I made excluding the purchasing of my first home. The current price of silver is around $16.50 an ounce. Yes, I didn’t avoid the following mistakes:
Mistake #1 – Herd mentality, investing in something just because everyone else is going it, not a good way to invest. The price of silver went sky high only to come crashing down.
Mistake #2 – I knew nothing about the silver market, had no idea why prices were moving up or down. I learned a valuable lesson, never invest in things that you don’t understand.
Mistake #3 – The price that you pay for something at a particular point in time has little to do with its future value. The price of silver didn’t bounce back to the $24.00 level until 2010! (30 YEARS LATER)
Mistake # 4 – Admit that you made a mistake and take the investment loss. Investors have a hard time taking a loss, holding on too long will only increase the amount you lose.
Mistake # 5 – I didn’t take into consideration that investing in another currency not only adds costs but additional risks. ($485.21 U.S. cost me $566.97 Canadian)
I still own the bar of silver as a reminder that I can make investment mistakes. Yes, I was young, in my late twenties at the time. However, I still see people make those same mistakes today. I take it out and show young people that my wisdom comes from making mistakes. Avoid them if you can but also learn from them. Most important, try not to make the same mistakes over and over again.
I plan to share other investment mistakes that I made in future blog posts and some that I managed to avoid.