My First Year in Stocks: A Record of Coming Back from -40% to -8%
I opened my first brokerage account early last year and bought a bit of everything. By March I was down 40%, and now I've recovered to -8%. This isn't a flex—I'm just writing it down for the record.
At first I bought based on news, then based on YouTube, and the results were equally bad. What actually changed things was setting a rule: only buy what I can explain.
1. No matter how good the story sounds, if I can't summarize it in three lines before buying, I don't buy it.
2. At -10%, I just cut my losses. I'll average down only twice, max.
3. Always keep at least 20% in cash.
Since I started doing this, my returns haven't skyrocketed, but I sleep well at night. I'm only investing at a size I could handle if I were down 40% again.
One regret: I wish I'd started with index ETFs from the beginning. I don't regret what I learned from individual stocks over the past year, but in monetary terms, it was a pretty expensive tuition.
3 answers
I really agree with this three-line summary rule. I also bought just based on the news and got stuck holding it for half a year, but now I’ve gotten into the habit of not buying unless I write down why I’m buying before I do—even if it’s just in a notes app lol. And the ETF point is true too. You can think of it as tuition, but if it’s 1 million won, maybe, but if it’s several hundred million won, that’s a bit unfair lol.
Well, an unconditional -10% stop-loss seems like a pretty risky rule. High-volatility stocks often dip -10% on pure noise and then recover, so if you mechanically cut all of those, aren't you just locking in losses? If you're happy with it, that's fine, but for a one-year track record, that judgment seems a bit hasty.
This is so true. I also held on without a stop-loss, hit -50%, lost my mind, and sold at the bottom. Now I only invest amounts I can hold through even a -40% drop, and I sleep well. Thanks for writing this down.