The Motley Fool

7 Key Lessons from a Decade of Investing

I am fast closing in on the 10th anniversary of my first ever purchase of a Singapore stock.

Back in 20 October 2005, I made my maiden investment and bought some units of retail and commercial real estate owner Suntec Real Estate Investment Trust (SGX: T82U). I still hold those units today and thankfully, the REIT has been a very satisfying long-term investment.

My portfolio has come a long way since then. In my decade of investing, I have picked up my fair share of winners and losers. There are learning points to be found in both.

Here’re seven key lessons I’ve gleaned from my investing journey so far:

Lesson No. 1: The value of simplicity – click here

Lesson No. 2: The power of long term investing – click here

Lesson No. 3: Find your investing home – click here

Lesson No. 4: Being Motley – click here

Lesson No. 5: Know when it is “too hard” – click here

Lesson No. 6: Investing is psychological – click here

Lesson No. 7: Staying humble

“Become more humble as the market goes your way”

– the late investor Bernard Baruch

Good outcomes in investing should ideally come from a good investing process.

But, there can be times when we may just be plain lucky. As such, we should strive to remain humble even when our portfolio rewards us with outsized returns.

One way to retain humility would be to write a bear thesis for every company which you own. This is why I chose to write a bear thesis for test and vehicle inspection outfit Vicom Ltd (SGX: V01) earlier this year even though I was already an owner of shares of the company back then.

Bear-cases for the companies you own may seem unpleasant to write, but I have learnt over time that there is great value in putting the brutal truths on the table as you consider your investments. A bear thesis lays out possible threats to look out for. This also lessens the possibility of being blind-sided by risks.

A Fool’s take

There are many ways to approach investing.

My preference is towards long-term investing in growth companies with a simple investing thesis. At the same time, I remind myself to be flexible in my thinking and not be too dogmatic. I use the “too hard” pile often as well.

In the act of investing, we may also want to take into account the possible psychological biases that can influence our decision making. And if we find investing success, we may want to remain humble.

Overall, the above is an investing approach which fits my lifestyle as I do not have to tend to my companies on a daily basis. If the business keeps purring, I can enjoy a good night’s sleep and spend time on other important things in life.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Suntec REIT and Vicom.