The Motley Fool

8 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 eight key lessons I’ve picked up 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: Be 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 – click here

Lesson No. 8: Keep an investing journal

In my view, one of the greatest advantages of the long-term investor is the accumulated knowledge that he or she can gain from following companies over the long-term.

Keeping an investing journal helps in retaining that knowledge.

Personally, my daily investing routine is to gather information about each company which I own and organize them into a document. Before I take any action on an investment, this will be my go-to document to review.

Writing down your own thoughts also helps to reduce errors such as hindsight bias or recency bias. The former bias may occur as we humans often misremember what we had believed in the past. The latter bias, on the other hand, can be described as the act of placing more emphasis on recent incidents or experiences while ignoring longer-term history.

Looking back at our own thoughts can also help us identify our blind-spots in investing. This gives us a chance to act to prevent the same errors from reoccurring.

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 too.

In the act of investing, I also try my best to take into account the possible psychological biases that can influence my decision making. Keeping a journal is one way I deal with my biases. It’s important too, in my opinion, that one remains humble even if he has found investing success.

Most of all, my approach fits my lifestyle. 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.

I hope these lessons I’ve learnt can be helpful for you too.

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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.