Learn From Your Mistakes

The only way to avoid mistakes is to avoid doing something.  And even in this scenario, one can argue there is a greater mistake by incurring opportunity cost – meaning there is a cost to not doing something.  I believe this is why my Dad always encouraged me to learn from my mistakes, to keep trying, and to do my best to do better “the next time around.”

Likewise, when investing, the only certain way to avoid making a mistake (to avoid a loss) is not to invest, and that could be the worst mistake of all.  Many have told me over the course of the last year they wished they hadn’t stopped investing.  Some did it out of fear, and many just out of uncertainty.  When we invest and things don’t go as planned, it’s important to learn from this – about our tolerance for risk and more about our investment profile.  But it doesn’t mean we should stop investing.  And when losses occur, if we turn this into a learning experience it can help protect us from taking on too much risk in the future, or from making the same mistake twice.

Don’t become discouraged.  Instead, invest early and often to help accumulate savings for the goals you have… whether a home, paying for an education, or retirement.  And don’t stop!  Over time, make adjustments as needed by working closely with your advisor and by learning from your mistakes (and also the mistakes you see others make).