I wanted to share a story of my first ever taste of share investing and why I am now acutely aware of the work that needs to be done in order to find a winner.
My first taste of the sharemarket
It was the 27th of December 2017 and I must have either had too much Christmas Ham, too many Prawns, too many beers, or a combination of all three.
Being the complete novice that I was I gave Retail Food Group Ltd (ASX:RFG) a solid 10 minutes research after getting a tip from a mate and couldn’t believe what I had found.
Not more than one month earlier the very same company was trading at nearly $5 and I was able to buy it for $2.50. I could hardly contain myself as I knew I had to get in quick before the market saw what had to be an undervaluation and jumped on it. I promptly purchased the minimum parcel of shares I could for which the total outlay including brokerage came to exactly $510.
In case you don’t know, Retail Food Group (RFG) is Australia’s largest multi-brand retail food and beverage franchise owner. It also roasts and supplies coffee products.
I was as proud as punch and began immediately working out what I would do with the profits I was about to make. Things quickly went from me becoming the next Warren Buffett to realising my misjudgement and promptly saying goodbye to my money.
Over the coming days, it felt like the only thing negative on the TV and the internet was about RFG. It was not looking good, they had gone from trading halt to trading halt as news came out of mistreatment of their franchisees and the money troubles they were going through.
It wasn’t long before my initial investment of $510 had evaporated to a point that the brokerage alone would cost me more than what I could sell the shares for. My confidence was shot, my once puffed out chest had quickly seen me become scared of my own shadow, and the thought of ever investing again seemed beyond me.
I’m actually glad I lost all my money
These shares still sit in my portfolio at a total/combined value of $9.80 and serve as a reminder that if I don’t do the research and continue to up-skill myself — it will all too quickly happen again. I always remember this when it comes to investing: “If everything was as easy as looking for something cheaper than it was the day before and buying it, everyone would be getting rich.”
Since that first experience, I am proud to say I have put in the time and surrounded myself with people much smarter than I am to ensure I don’t make another RFG-like purchase again.
My advice is this, ‘Never stop learning.’ No-one knows everything. ‘The more you apply yourself the bigger the reward will be.’
Here’s to hoping this is my one and only Retail Food Group confession.
If you’re just starting out, do yourself a favour, enrol in the free course below — and as many other Rask online courses as possible.
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