As 2025 comes to an end, it’s reflection time again, looking back at my personal investing hits and misses. If I zoom out even further, to almost two decades ago (2005, to be precise) when I first developed a serious interest in investing, I can confidently say this – beyond the financial wins and losses, the journey and the learnings have been priceless.
My idea of investing today is radically different from where I started. From futile attempts to outsmart the market, to setting realistic expectations. From wanting to be a trading expert making clever bets, to simply understanding how the financial world works and staying updated. From obsessing over “smart” metrics and indicators, to focusing deeply on psychology. The ride so far has been full of eye-opening moments.
This post is for novice and seasoned investors alike. The core principles will be relevant to everyone.
THE HITS
Strategy eats luck for breakfast
Markets and economies move in cycles. They rise, they fall, and they confuse. Moving to a defined portfolio allocation and sticking to it, irrespective of news cycles and market euphoria, helped me control reactionary decisions and stay aligned with long-term goals.
One of the most important rules of behavioral investing is that results matter less than the process. You can be right and still be a moron!
“You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long time.”
Studying great investor philosophies
The sheer amount of wisdom available through books and podcasts still amazes me. And with time, they have become more easily accessible. Early investors often dismiss theory as a waste of time and jump straight into trades. In the software industry, where I’ve spent my career, that’s equivalent to building a system without a blueprint or a design!
John Bogle’s low-cost indexing and “stay the course” philosophy, Peter Lynch’s familiarity-driven stock picking, Ray Dalio’s economic cycle frameworks, and Warren Buffett’s timeless reminder that most investors “water the weeds and cut the flowers“. These aren’t opinions, rather enduring pillars of investing.
Understanding Behavioral Psychology
It’s not the smartest people who win at investing. In fact, intelligence often breeds overconfidence. I developed a deep interest in psychology and quickly realized how much it explains market behavior.
If I had to recommend just one thing to focus on at any stage of the investing journey, it would be self-awareness. Some biases that hit hard –
- Endowment Effect : Overvaluing what you already own
- Confirmation Bias : Searching for information to justify your decisions
- Sunk Cost Fallacy : Doubling down just because you’re already committed
I’ve written earlier about The Behavioral Investor and Investing Mind Traps. The core realization – fighting harder won’t save you, thinking clearly will.
Amygdala Hijack
I’ve never been a short-term trader, and I never will be. Trading activates survival instincts, hijacking the amygdala – the reptilian brain responsible for fear, euphoria, regret, revenge, and impulsive decisions. It’s evolutionary, automatic, and incredibly hard to override.
That’s why most people lose money trading. The famous behavioral market cycle applies not just to long-term trends, but even more so to short-term trading.
Not everything needs to be taught
I explored ideas, experimented gradually, and learned by doing. This helped me build my own framework for stock picking and continuous iteration. I used screeners, technical charts, entry-exit strategies, and pattern correlations (such as one below as shared in my NIFTY alpha post). The key was curiosity without blind conviction.
Learning fundamentals and technicals (without overcomplicating)
The goal isn’t mastery, rather it’s clarity. Understanding fundamentals and basic technicals helped me stop blind stock picking based purely on news. More importantly, it gave me conviction during turbulent times.
As Peter Lynch explains – always remember why you bought a stock. If things don’t go as expected, revisit whether the original premise still holds.
Time and opportunity cost
Where your money sits every single day matters more than most people realize. Idle cash is criminal if you’re serious about investing. Over time, I’ve moved to keeping almost 99% of my wealth invested – spread across instruments and diversified appropriately.
Taxation matters
This should be part of every Investing 101 course. Understanding capital gains taxation, loss set-offs, tax harvesting, and staying updated with changing rules has led to far better capital rotation decisions. You may not avoid taxes entirely, but you can definitely be smarter about them.
Trusting historical data
I once wrote about this in my Same As Ever post; certain market truths have survived decades. Betting against them leads to overthinking, frequent decision-making, and diluted conviction.
One timeless chart from The Psychology of Money, the Dow Jones recovery curve reinforced my belief that, over the long run, equities win. The gray bands showing recovery periods to previous highs are reassuring every time the mind is clouded with doubt.
Simple and Complex Investing
Mutual funds have been silent winners, whether SIPs or lump sum, with minimal active involvement. At the same time, I gradually moved into direct equities. The key was balancing time spent versus return on effort. Markets do offer alpha in pockets, and selective stock and sector picking can’t be ignored.
The momentum play
This one goes against Buffett’s famous advice: “Be fearful when others are greedy…” My approach has been to ride the wave, but not be a maximalist. I’d rather regret an early exit than failing to catch the peak.
Momentum investing has worked well for me in recent years, from infrastructure booms in industry to recent gold and silver rallies. I’ve explained this in detail in a separate post on riding the momentum wave.
Every information source deserves exploration
There’s a misconception that casually received information is always bad. While it absolutely needs validation, dismissing it outright (because it conflicts with your investment theories or style) can mean missed opportunities. Some of my profitable bets came from casual conversations, backed by my own independent research.
My only regret? I never thanked those friends/acquaintances well enough 🙂
THE MISSES
There have been many misses, each worthy of its own story or a blog. But these had the biggest impact on my journey.
Real estate – the opportunity-cost killer
For me, real estate has been a dud. It’s a rigged world of investment. For retail working class investors, this is a game that has all the parameters to work against you. It’s opaque, speculative, capital-heavy, and unforgiving for retail investors. With limited starting capital (which is true for most early investors), it destroys compounding and locks you into justifying a decision forever.
If I had to name the biggest opportunity-cost loss in my portfolio, real estate would be it.
Panic Selling
I talked about Amgydala Hijack above, but this is in context of market free fall. Market crashes trigger fear, and I’ve panic-sold more times than I’d like to admit, without any strategy. I did well with mutual funds but performed poorly with direct equities early on, mainly because I didn’t know why I owned certain stocks.
When the market cracked, I exited like a poker player folding a bad hand without conviction.
No stop-loss Meltdown
This may sound contradictory to panic selling, but it’s not. Blind hope can be just as destructive. Stop-losses are life jackets in direct equity investing. I learned this the hard way, watching stocks go from 100 to zero.
One of Buffett’s most underrated lessons:
- If you don’t bet, you can’t win.
- If you lose all your chips, you can’t bet again.
Ignoring risks
As position sizes grow, risk management becomes non-negotiable. A painful example was the debt fund turmoil, where I foolishly assumed “debt equals safety”, leaving investors like myself in lurch for years. Position sizing relative to risk-reward is a lesson learnt permanently now.
Some of these learnings are technical. Many are emotional. I keep revisiting them, especially during uncertain and chaotic phases. They keep me grounded, realistic, and focused.
A new year brings new opportunities and new lessons. And if investing has taught me anything, it’s aim to be a little wiser today than you were yesterday.
