I embarked on my investing journey in August 2007 with mere hundreds and a fervent aspiration for riches. Convinced that the stock market was the road to financial independence, I set up a brokerage account, ready to dive into the world of equities. With $250 in hand, I meticulously selected my inaugural investment: Netflix (NASDAQ: NFLX).
Thus began my education in investing.
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Gaining Insight from the Past
My entry into stock ownership coincided with the ominous approach of the Great Recession — a period rife with financial turmoil. Amidst the market’s descent into darkness, Netflix emerged as a beacon of hope for my fledgling portfolio, defying the odds by soaring amidst the economic maelstrom.
Enduring the tumultuous market conditions, my Netflix shares appreciated an impressive 144%.
A Pricey Mistake
Amidst the clamor of advice to protect my capital and avoid overexposure, I succumbed to the temptation to heed the cautious voices. With Netflix dominating my portfolio, I gave in to the notion of profit-taking and divested 10 shares in late March 2009, congratulating myself on a shrewd move.
Little did I foresee the pang of regret that awaited me.
Currently trading at approximately $636, those 10 shares would have grown to be worth over $44,000 today, a stark contrast to the meager $245 I pocketed back in 2009.
Extracting Wisdom from the Error
Although this costly blunder cost me dearly, it imparted a crucial lesson: the merits of holding onto investments for the long haul. Resisting the urge to prematurely cash in on gains, I opt to hold unless a fundamental shift in the investment thesis occurs.
While I’ve made exceptions like selling to fund significant life events, I maintain a steadfast commitment to long-term investment strategies.
This philosophy has paid off handsomely, with investments like Netflix, Mercadolibre, Chipotle, and Tesla yielding substantial returns over the years.
My brief encounter with selling Netflix prematurely proved to be the most expensive lesson in my investing journey, but the subsequent wisdom it bestowed has led to numerous lucrative prospects from holding stocks for extended periods.
Exploring Future Investment Avenues
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