# The ONE thing...



## NextLevelInvesting (Mar 14, 2016)

Hey everyone. You guys are all amazing and have helped me out so much in the past. This is my first post, and would appreciate feedback to this question I was recently asked. 

- What is the one thing you wish you knew before you started Investing? -

Thanks all. I can't wait to hear your answers! 
~Ryan~


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## heyjude (May 16, 2009)

The importance of keeping MERs low.


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## jargey3000 (Jan 25, 2011)

Don't put your money in the bank;
Buy stock in the banks!


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## Davis (Nov 11, 2014)

Don't buy mutual funds. Don't imagine that some money manager is going to be smarter than the market.


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## Mukhang pera (Feb 26, 2016)

Two items for now:

1. Do not think of investing as something to be done later in life.

2. If investing in real estate, observe the maxim: Always buy land; never sell land.


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## jargey3000 (Jan 25, 2011)

Don't get greedy; you'll never lose by taking a profit.


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## Soils4Peace (Mar 14, 2010)

heyjude said:


> The importance of keeping MERs low.


+1

Like many folks I thought that past performance was a good predictor of future performance, and did not think MERs were important at all.


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## jargey3000 (Jan 25, 2011)

NextLevelInvesting said:


> Hey everyone. You guys are all amazing and have helped me out so much in the past. This is my first post, and would appreciate feedback to this question I was recently asked.
> 
> - What is the one thing you wish you knew before you started Investing? -


Where the TSX was going to be in say, 3 months!


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## Just a Guy (Mar 27, 2012)

Know your investing personality.


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## Mechanic (Oct 29, 2013)

jargey3000 said:


> Don't get greedy; you'll never lose by taking a profit.


My favourite


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## leeder (Jan 28, 2012)

NextLevelInvesting said:


> Hey everyone. You guys are all amazing and have helped me out so much in the past. This is my first post, and would appreciate feedback to this question I was recently asked.
> 
> - What is the one thing you wish you knew before you started Investing? -
> 
> ...


I wish I knew what my tolerance to losses were especially during steep market selloffs. I used to obsess over the losses and beat myself up. I'm way better now than I was then because I'm now much more confident with the companies I'm invested in and the fact that I'm diversified across geography and industries.


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## amack081 (Jun 23, 2015)

I'm still a young investor myself, but I personally don't invest in items or companies I dont fully understand.


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## NextLevelInvesting (Mar 14, 2016)

Love that. Same here on both accounts.


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## NextLevelInvesting (Mar 14, 2016)

leeder said:


> NextLevelInvesting said:
> 
> 
> > Hey everyone. You guys are all amazing and have helped me out so much in the past. This is my first post, and would appreciate feedback to this question I was recently asked.
> ...


Thanks leader, that's a big one. 
This caused a lot of stress for me early on as well. Some wise advice I received was to 'always pay attention to the tension' if your not able to sleep at night, you may have too much of your money invested.


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## NextLevelInvesting (Mar 14, 2016)

Mechanic said:


> jargey3000 said:
> 
> 
> > Don't get greedy; you'll never lose by taking a profit.
> ...


I second that. 
Greed is the number one thing that led to the single biggest loss in my investment career. I definitely learned this one the hard way. 
Great post.


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## NorthKC (Apr 1, 2013)

Contribute as much as you can regardless of your income. When I had very low income, I stopped investing but I now realize that had I contributed just $20/month over 4 years with good return (at the time), I would have had a nice nest egg. Time is your friend.


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## thepitchedlink (Feb 17, 2014)

The power of MER's.....keeping them as low as possible.


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## atrp2biz (Sep 22, 2010)

By being greedy. Don't sell and turn one-baggers into five-baggers. By never selling, I limit the number of mistakes I can make on a particular stock.


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## Rusty O'Toole (Feb 1, 2012)

Here is how to beat 90% of professional money managers with almost no risk.

Buy an ETF that mimics the S&P. This is the benchmark the pros are out to beat, and most of them fail to do so over time. Warren Buffet has a $1,000,000 bet on that the S&P will beat the 5 best hedge funds picked by his rival, so far he is ahead 6 years out of 7.

To protect and enhance your gains get a weekly chart of the S&P and add a 10 period and 50 period moving average. When the 10 is above the 50, buy. When the 50 is above the 10, sell. Right now the 50 is above the 10 so keep your money until we see them cross the other way. With this method you only need to check your account once or twice a month, and do a trade every few years.


The alternative is to make a study of the markets and get good at trading. It takes an immense amount of work and dedication and you will still have a hard time beating the above method.


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## none (Jan 15, 2013)

Something I still try to keep in mind.

Your gut is an idiot and 95% of investing success is simply two things: 1) Relatively low MERs (doesn't have to be rock bottom but below 0.4 you're doing great); 2) Stick to the plan: Don't cash out when things turn, keep buying on your schedule regardless of index price (see point 1: your gut is an idiot.)


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## lonewolf (Jun 12, 2012)

NextLevelInvesting said:


> - What is the one thing you wish you knew before you started Investing? -
> 
> Thanks all. I can't wait to hear your answers!
> ~Ryan~


 That investing was so hard would have been easier to have set up & run a different business. To your enemies tell them to invest to your friends tell them not to invest. Put your money in the safest thing possible. Though when the depression hits from my skill/ability @ investing I will be left standing. A lot of long term buy & hold investors I don't think understand the panic they will be facing. I don't even think it should be called investing for the average speculator.


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## My Own Advisor (Sep 24, 2012)

Avoid high priced mutual funds.
http://www.5iresearch.ca/blog/my-biggest-investment-mistake-high-cost-funds


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## james4beach (Nov 15, 2012)

The less you trade, the more you'll make.


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## lonewolf (Jun 12, 2012)

Like that one James though not many traders these days mostly givers & takers. Corruption has always been around on Wall Street seams to be getting worse. When the game is rigged the takers are the riggers the givers are the players that play in the rigged game.

Not a zero sum game for those playing against the riggers. Just like it is below a zero sum game for investors/giver playing against a casino. The casino is the investor/taker & has a better out come above zero sum game. Calling a giver playing against a rigged market an investor is crazy, it is like calling a gambler playing against the casino an investor. 

Years ago I never herd of calling a speculator/gambler in the market an investor. If the investor did his home work & used statistics, math & numbers to give them an edge they were called speculators. Those that just played without using a method to give them an edge were called gamblers. Calling everyone that plays the market now days investors kinda makes you wonder if sentiment is to the danger level of positive.


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## NextLevelInvesting (Mar 14, 2016)

Lonewolf,
Thanks for the comment,

I agree, being an 'Investor' is definitely a term that is often wrongly used. Hedge fund guys are not 'investors', they are speculators. If you don't understand the business and what the fair value for that business is, then how can you call buying shares in that company investing? 
You can't...

However, I don't believe that we are at a fundamental/statistical disadvantage when comparing us to the 'big guys'.
In fact I believe we actually have a few big advantages:

1. We are small.
We can move in and out of a position in an instant, while it can take the big guys weeks to exit and enter a position. 

2. They think in months, We think in years. 
If the problem with the company is only short term, (eg. A year or less) we can take advantage and buy more shares on the way down. 
The big guys have a very small time window, where they have to at least be doing as good as their peers, or people will pull their money (They generally have a 3 month window). If a problem will persist more than 3 months, they're forced to move their money elsewhere.

3. We are patient. 
We can sit in cash, for years if necessary, waiting for that excellent opportunity to buy a company for $5 that's worth $10. 
The big guys can't. They almost always have to have their money on the market. They can't wait for those big fluctuations while we can. 

4. We don't have limits. 
We can invest in small cap stocks that are more likely to be undervalued. 
Mutual funds have minimum market cap requirements that have to be reached before they can even look at a company. 

5. We don't have to over diversify.
We can be extremely focused on stocks and industries we understand, in businesses that have a small downside with a huge potential upside. 
Mutual funds have to diversify, sometimes owning hundreds of companies. How can you beat the market, when you essentially are the market?

The market will always present opportunities for us. All we must learn is how to take advantage, and then act. 

~Ryan~


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## zylon (Oct 27, 2010)

NextLevelInvesting said:


> - What is the one thing you wish you knew before you started Investing? -


It is deucedly difficult to learn from other people's mistakes, so just jump in and make your own; if lucky, you'll only have to learn each lesson once.

Of all the things I wish I knew "in the beginning", something Mawer sent out today states an important principle quite succinctly:

"Avoid short-term noise as much as possible, while paying more attention to information sources that emphasize long-term perspectives. There is an immense array of information on investing out there…and you don’t need to read it all. Information that doesn’t benefit you is anything that doesn’t give you new insights while exposing you to the emotions of others."
http://artofboring.com/seneca-says-avoid-the-crowd/

That _"emotions of others"_ bit is why I spend far less time on forums such as this one, and also care less about what others are doing - especially traders.


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## Video_Frank (Aug 2, 2013)

I could write a lot on this subject but I'll stick to a quote that hits home for me. This is taken from Page 21 of Dan Bortolotti's excellent "Guide to the Perfect Portfolio":



> In his book _'The Gone Fishin' Portfolio'_, Alexander Green identifies six factors that affect a portfolio's performance: how much you save, how long your investments compound, your asset allocation, how much you pay in expenses, how much you lose to taxes and the return on your investments. Only the last of these is beyond the investor's control ... yet this is the factor that so many investors spend their time fretting about.


So that's what I do. Save as much as I can, for as long as I can, with an AA I'm comfortable with, in low-cost ETFs, in accounts with minimize taxes. I can't control returns so I ignore them and when I buy with new funds, I buy whichever asset category is lagging.


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## NextLevelInvesting (Mar 14, 2016)

Thanks you video_frank and Zylon for your excellent comments!

Zylon, I absolutely love this quote you shared;
'Information that doesn?t benefit you is anything that doesn?t give you new insights while exposing you to the emotions of others'

Video Frank,
There are some great points in that quote you referenced, I especially think time to compound is the one with the highest gravity for me. 
I'm not sure I agree or maybe I don't completely understand Mr. Greens last point, that the only thing that is out of our control is our investment return. 

Could you put that into context for us and maybe explain it further if you get the chance. 

Thank you again! 

~Ryan~


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## Video_Frank (Aug 2, 2013)

NextLevelInvesting said:


> I'm not sure I agree or maybe I don't completely understand Mr. Greens last point, that the only thing that is out of our control is our investment return.
> Could you put that into context for us and maybe explain it further if you get the chance.


Sure.

I'm a Couch Potato investor. I buy the indices in the form of XIC, XBB/VAB, VTI and VXUS. I accept whatever returns they bring, in the form of capital appreciation (or depreciation) and dividends. Not that past results *ever* predict future returns but I do use these numbers as a guide.

What I *don't* do is change my plan if the markets change - i.e. oil drops, Canadian dollar tanks, gold takes off, etc. I add money as per my schedule and add it to my lagging asset class. I can't predict which asset class will be hot so I don't chase returns. I accept that the investment returns are out of my control and i stick to the plan. I always point to the investment periodic table when people try to predict which asset class is going to take off. 

I don't have a crystal ball so I do the first 5 things and I don't worry about the 6th. I hope this helps.


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## NextLevelInvesting (Mar 14, 2016)

Video_Frank said:


> Sure.
> 
> I'm a Couch Potato investor. I buy the indices in the form of XIC, XBB/VAB, VTI and VXUS. I accept whatever returns they bring, in the form of capital appreciation (or depreciation) and dividends. Not that past results *ever* predict future returns but I do use these numbers as a guide.
> 
> ...


That does help out, thanks Frank.
first of all, canadaian couch potato is a ridiculously excellent name. 
Second,
I really like the passive income model that you 'Couch potatoes' follow. I think that its really powerful, and probably a great way to go for many investors.

for me, I like to focus on the companies themselves. I see buying shares as actually buying a piece of that company.
thinking in this way makes learning about the companies much more interesting, it also changes your mindset to the long-term outcome of the business. 

My investment style (next level investing)
Combining valuation, with margin of safety, then adding charting and option trades to the mix. it's always very interesting to learn about the different styles out there, and the pros and cons of each. I love this stuff and hope to soon be helping others learn it as well.

thanks again

~Ryan~


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## none (Jan 15, 2013)

Video_Frank said:


> Sure.
> 
> I'm a Couch Potato investor. I buy the indices in the form of XIC, XBB/VAB, VTI and VXUS. I accept whatever returns they bring, in the form of capital appreciation (or depreciation) and dividends. Not that past results *ever* predict future returns but I do use these numbers as a guide.
> 
> ...


THis is one of the reasons why I try NOT to track my portfolio. If you are a CP investor nothing really nothing matters but your asset allocation - value is irrelevant. 

This past 'correction' was a great learning experience for me. I sure felt silly buying the CAN index when it was 11.8K. Now I look back after a 10% gain in 2 months as great. Of course, the big chunk I bought when the CAN index was 15400 looks dumb in hindsight. It's all unpredictable and if you stick with the CP it'll all wash out in the end.


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## smihaila (Apr 6, 2009)

NextLevelInvesting said:


> Hey everyone. You guys are all amazing and have helped me out so much in the past. This is my first post, and would appreciate feedback to this question I was recently asked.
> 
> - What is the one thing you wish you knew before you started Investing? -
> 
> ...


You've been asking the same questions on RFD (see http://forums.redflagdeals.com/what...ou-knew-before-you-started-investing-1943193/)
What's going on - are you trying to do social studies on us, the forumists, or what?

Anyways, here's my tip / answer to your "question": There is no free lunch. Do you own hard, homework and don't try to cut corners and ask someone else to spoon-feed you, ok?


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## NextLevelInvesting (Mar 14, 2016)

smihaila said:


> You've been asking the same questions on RFD (see http://forums.redflagdeals.com/what...ou-knew-before-you-started-investing-1943193/)
> What's going on - are you trying to do social studies on us, the forumists, or what?
> 
> Anyways, here's my tip / answer to your "question": There is no free lunch. Do you own hard, homework and don't try to cut corners and ask someone else to spoon-feed you, ok?


Thanks for the Reply Smihaila,
That's a good lesson, and I agree whole heatredly. Learning to invest takes time, and energy, and sometimes a swift kick to the butt to keep going. And no, i'm not doing a social study, though I think it's awesome that you answered the question even though you may have thought so. I appreciate it. 

Where this question is coming from is I want to start a free investing website, that helps people learn what I've learned over the years, to keep people accountable and to push them to take action. I want to be that swift kick to the butt that people sometimes need... and honestly, I don't want to screw it up. So someone suggested I ask the forums, since lots of you are veterans, for what's most important to them as a starting point.

I also thought that it was a great question, and could help anyone who is new to investing on this forum, learn what the Vet's think is important. This is already such a great community.

I've made a couple big investing mistakes in my career, at one time losing all but a few dollars of my hard earned savings, and that was tough, but my wife still believed in me, and so i couldn't stop believing in myself, so I continued to learn and grow and add a few new 'tricks'.
My goal is to limit the amount of mistakes others make by learning from my own, and teaching what has worked well for me, and what hasn't. I'm sorry if this seems dishonest, or selfish, or whatever, but honestly i'm brand new to a lot of aspects of this, and again, I want to do my best to serve my (so far non-existing) audience.

Thanks for understanding, and again, thanks for your honest, thoughtful, and excellent responses. You are all great.

All the best,

~Ryan~


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## smihaila (Apr 6, 2009)

Thanks for explaining where you are coming from. Yes, info on making each of us more financially savvy and more responsible is never enough. Words of wisdom from tried and true persons or approaches will always work better than the mainstream media. Most of the "investing books" fall in the same category - mainstream propaganda - read tens if not hundreds of books and they were all about how to separate you from your money better, to the advantage of "The Wall Street Gang".

Best of luck in your quest.


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