I first flirted with the idea of investing back at the 'peak' in 2007. Im a physio by trade and I had all sorts of patients (plumbers, brickies etc.) talking about how easy it was...
Little did I know at the time that was most likely a signal of the top lol...
So back on topic I lost 95% of everything I initially invested, basically the majority of my first 2 years in the work force was reduced to nothing. (Was invested heavily in Babcock and brown, and BB Infrastructure due to 'tips' from knowledgeable people).
I got out of the market for about 2 years but then in 2010 decided I would re-enter and do it my way. Not listen to 'experts' but put effort into investing what I thought was going to do well, not what some suit thought.
Instead of playing against the big boys I focused solely on small caps. The thing about small caps is that individual company fundamentals matter. In a 100 billion dollar company, every man and his dog has done a 'valuation' but its movement will almost always just follow the market. So a 'blue chip' is more an investment on medium term market sentiment than it is on the 'actual' company.
In a small cap, if the individual business is doing well, but it has no market exposure you can see some amazing gains when the 'market' learns the story. If the share price is languishing because the company is a dog, however, you can end up with some heavy losses.
In terms of risk management I'm pretty brazen, having lost 95% and it not affecting my day to day life in anyway I'm a lot more brazen than most people... When you've looked the stock market devil firmly in the eye and smiled, you dont really have much to fear...
I find that I can I try to setup a 'reason' for why I buy a share and then track that share closely. If it does well, I try to think "what factors did I pick correctly". Sometimes I've simply got lucky and picked an average company in a good sector, other times I've done really well and picked an amazing company in an average sector. It really important to be as self analytical as possible. Never get too worked up about a win. One multi-bagger doesnt maker you god. On the flip side, at age 20-30, one big loss is meaningless. The experience gained will mean alot more than the money loss.
In terms of gains I've made since getting back into it since 2010, you probably wouldnt want to know. I'll post an approximate figure if you want, but it would probably intimidate you lol. (Not trying to walk around with a big head, but I think I've had my fair share luck lol)
Oh last thing. DONT WHINGE ABOUT THINGS YOU CANT CONTROL. If you cant control high frequency trading, dont worry about it. It's meaningless. Whether they ban bot trading or not, the fact remains if you pick a good company that does amazing business, you'll make heaps of money. A bot has never and will never alter the day to day running of a business. If the business is sound and the bots are pushing the SP lower. GREAT! You've got yourself a buying opportunity.
You can either swim with the tide or struggle against it.
The last thing I want to say before I end my mammoth post of verbal diahorrea and poor editing.
My favourite website is http://adventuresincapitalism.com/ Not necessarily for his exact 'tips' (he tipped AXM lol!) but for how he explains his basic philosophy. I believe you need a basic outline for what you 'want' to invest in.
Mine is small cap shares out of favour with the market with a high growth potential. Companies that have been 'overlooked' by professionals. I try to sell out when they become 'in favour' of professionals.
