Confessions – my biggest investment mistake

Confessions - part 1

I have something very painful to share, and I hope once you hear it you won’t jump on the nearest boat and abandon these Islands of Investing….. I’ve made huge mistakes when it comes to investing. Not just one or two, but a whole bunch of them.

Admitting mistakes is difficult, but it’s a non-negotiable it you’re striving to become a better investor. I find it’s a pretty good rule for life in general also. Once admitted, you have a tremendous opportunity to learn some invaluable lessons, the kind that only come from experience.

My biggest investing mistake is a great example, because I made a number of mistakes, all in the one investment. It was the most expensive mistake that I’ve ever made. It had wiped out almost all my gains from the previous two years – far from a life-threatening disaster, but personally very painful.

There’s a lot to cover here, so make yourself comfortable as I relive the pain all over again… [Read more...]

Growth vs Income investing – a conversation between two stocks

Dividend vs growth investing

When you’re getting started with investing in stocks, it can feel a little tricky getting a handle on which basic style or strategy to adopt. There are so many different buckets you can put investment styles in to, but one of the major distinctions is between ‘growth’ and ‘income’ investing.

So what is the difference between growth and income investing? How can you tell the difference between a growth and income stock?

Well, I was lucky enough to stumble across a recent conversation between a Growth Stock (GS) and Income Stock (IS), and even more fortunately, I managed to record every word. I think this will be helpful for getting some insights into these two different approaches! (continue reading at Even Steven Money…)

A grown man’s first Disney experience – from Australia

Disneyworld

Most of the focus here on the Islands of Investing is on how to become a better investor. But a big part of our focus is also on ‘living well’ – after all, that’s one of the big reasons that many of us invest in the first place, to improve the quality of our life. Living well can mean different things to different people. So far, we’ve mostly touched on how this relates to becoming a better person, developing better behaviours, habits and attitudes that can help make life better and help us ‘live well’.

But living well can also mean doing things which are fun, exciting, and important to you. For my wife, some of her most cherished childhood (as well as recent!) experiences are from family trips to Disneyland and Disneyworld. I was lucky enough to have joined her and her family for my very first Disneyworld experience around 8 years ago – and it was just incredible!

Femme Frugality has been doing a series of posts on Disney, and I’ve shared a guest post about this first experience – as a grown adult coming all the way from Australia! If you’re interested to hear a little more, or are simply looking for some other great personal finance content, head on over to Femme Frugality’s site and check it out!

It’s the BEST! (until everyone finds out) – benefits of going against the crowd

It’s the BEST! (until everyone finds out) – benefits of going against the crowd

You stumble upon a beautiful little restaurant on your travels. No crowds. It’s not in your guidebook’s ‘top 20’ best restaurants. But the experience is just amazing.

Word spreads. It becomes popular, and makes it to No 1 on Tripadvisor. Suddenly, thousands of people looking to holiday there think “Wow, we have to go to the number 1 restaurant here!” They turn up to find a 2 hour wait, crowds of tourists, and a restaurant that is struggling to keep up and maintain the great charm and quality that made it popular in the first place. It slowly loses its status as a great restaurant, as you search for the next great, new experience – without all the crowds.

The same thing often happens with investing. [Read more...]

Care and maintenance (or ‘hanging in there’)

Care and maintenance

Some of the best advice I ever received was to never, never, never give up.

And I’m not talking about the never give up in a ‘crazed-high-energy-just-keep-going-at-it-100%-non-stop-until-you-break-it!’ sort of way. More like “don’t completely throw away that important thing you’re doing”.

But man, there are so many times I desperately want to!

Instead, I’ve found that adopting a ‘care and maintenance’ strategy can help keep those important goals alive when you’re at your worst, and minimise your regret from giving up on them completely. Here’s a few examples: [Read more...]

Finding your investment rhythm

investment rhythm

As I stood up to leave the train arriving in the city to head off to another typical day at work, I found myself doing the usual, awkward dance. I set out to briskly walk off the train towards the office, at my natural pace. But of course, the train is packed, and everyone is queuing to slowly get off. So I join the line and start the slow shuffle off the train. “OK, now I’m off, time to set into my nice, natural walking rhythm!”.

Er, no. The platform is packed as hundreds of people try to squeeze out of the various station exits. I do the awkward dodge, duck, and weave, like an amateur Dodgeball player. Stop and shuffle behind a pack of dawdlers. Find a gap and burst past. Sidestep right, looking for a clear path where I can settle into a steady walk. Run into an oncoming pack of passengers trying to board the train I just left, which has me twisting and turning slowly like swimming against a wave in the ocean. [Read more...]

Forecasts are not facts (how I learnt the hard way)

Forecasts are not facts

There’s a huge difference between forecasts and facts. They’re pretty much at opposite ends of the spectrum. You’d be silly not to realise that, wouldn’t you? I mean, this is completely obvious….. right?

Well, unfortunately, I’ve fallen well and truly into the silly camp on many occasions where I’ve unintentionally treated forecasts as hard facts. The future earnings numbers are there printed on the page, clearing away the fog of an uncertain future, so it must be true. Then given that this is going to happen, and based on the current stock price, this is definitely a good investment! Buy!

One great example of my ‘forecasts are facts’ mistake was with a little company called ‘Cool or Cosy’, [Read more...]

Can you really follow Buffett’s number 1 rule – never lose money?

never lose money

This post appears as a guest post over at Modest Money, so head on over if you’re keen to read more! But for those of you who need a break from reading, and would rather sit back, watch and listen to this post as a fun, animated slide show instead, check out the video below!

Hope you enjoy!

Take a Spin in this Stock Investment Simulation with Silex Systems

Silex Simulator

I’m always on the lookout for great investment ideas. And I came across one just last week that got me a little excited – Silex Systems (just the name alone makes it sound like a great investment, right??). A bit more speculative than I’d normally consider, but it sounded like it had great potential.

Unfortunately for me, I work with a firm that also performs financial audits for many listed Australian companies, and for independence reasons, we can’t invest in any of those stocks. Of course, Silex Systems happens to be one of them.

Despite my minor frustration, I watched some interesting events unfold over the next couple of days, and thought it would be a great example to share with you as potential investors. [Read more...]

The Liebster award! (and a few things about me)

liebster

I’m so thrilled to have been nominated for a Liebster award by the brilliant Debt Debs, which was extremely kind of her! This award seems to be focused on newer, smaller blogs, and our tiny Islands here is definitely among some of the smaller new blogs out there (but we do like the serenity here ;) ). What made me really happy was in Debs nomination she mentioned that she found the blog ‘comforting’, which is one of the things I’m really striving for here – thanks Debs!

To make things official, Debs has asked 5 questions which I need to answer, and then I need to make my own Liebster nominations. Sounds like great fun – here we go! [Read more...]