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Ilona Codes
Ilona Codes

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30 Things I Learned About Investing in 2020

Like most software developers and people in tech, I often experience imposter syndrome that reminds me of how little I actually know. For such imposters like me, it’s important to journal my reflections on what I am currently studying: finances and investments. That’s why I wrote my core “30 Things I learned about finance and investment in 2020.”

It’s always a great pleasure to publish such posts online, so not only can my readers find something useful and helpful in them, but also I can cheer myself up during autumn in rainy Berlin and keep myself accountable to learn about the markets and practice investment on-the-go with you.

“To know values is to know the meaning of the market.”—Charles Dow

If you are still here and curious, what are they about, you can check them below and share your opinion on them with me:

1. There is always something new to learn about the markets every day.

As long as you remember that, and stay up to date on their trends and understand them, chances are for better investment returns are high.

2. The stock market today is the place where the more the price of a stock’s share increases, the more people want to own it.

Even without the in-depth company stock analysis and just according to breaking news, most beginner investors are willing to buy it, ready to buy their market price or even higher.

3. Don’t pass on investor relations pages of public companies you are willing to invest in through buying their shares.

Instead, master a company quality research as well! Read, watch, study its public presentations and news from press releases.

4. Company market cap is too “loud” and overused metric to rely on it only when making an investment decision.

Price to Earnings (P/E) is the #1 fundamental measure that tops all other determining a company’s stock price movement.

Price to Earnings Ratio (P/E) = Stock Price / Earnings per Share (EPS).

A higher P/E ratio means investors are willing to pay more for each $ of annual earnings, so you can use this number to compare how investors are valuing other companies in the same business sector.

5. The business model of social media companies is making money by monetizing user’s time.

One of the main reasons I decided not to spend more than an hour on them per day. It just distracts me from my goals.

6. Free cash flow is what you should look for and evaluate first while reading a company’s financial statement for a quarter/year.

Basically, I will do some calculations by taking into account revenue, offerings, operating expenses, loan & debts, enterprise value, etc.

7. Value companies usually have more cash on hand.

If you are a value investor, you are interested in raising the interest rates of your investments. Cash performs best by earning the most interest via compounding interest.

8. Never think of buying anything immediately from anyone’s tip.

Instead, do your homework, so you can clearly understand what you are investing in. Please don’t buy anything without confirming it.

9. Consolidate and check your analysis research before investing.

If you studied financial management or finance at any university, the first course you likely take would be “Financial Decision Making.” It’s for a reason, of course. Always double-check, consolidate quality, and quantity analysis before buying/selling your assets.

10. Most of your investment losses are generally because of your low decision-making analysis.

11. If everybody is talking about a particular investment, it’s too late to invest in it.

Indeed, most smart investors have been already invested in it. Your job as an aspiring investor is looking for trends that might be popping up at least one year before it will happen.

12. The best investments are those you also use in your everyday life.

You are already an expert on that product/service and analyzing it every day while using it. So, having its shares, it’s a nice bonus.

13. Day trading is not investing; it’s a business.

If you want to become a retail day trader, you need to invest your money and time in education, starting capital, and tools for that. Treat day trading as a business in which you need to actively be working as a professional. It’s not a passive income.

14. It’s good to automate everything related to an individual investment.

Fortunately, we are going through global digitalization, and there are lots of products and services we can use to ease investment activities.

15. Long-term individual investors don’t manage their investment portfolio from the phone.

You need to see the “full” picture of what you are owning. Usually, your assets and even sold assets will contain lots of information that you should track. It’s impossible to visualize and evaluate the whole portfolio from the smartphone’s display.

Thank you for reading! 🙏

If you enjoyed the first 15 things about investing in 2020, you could get the other 15 through my newsletter now! (+bonus: the cheat sheet on how to free extra monthly cash from your dev-salary for investment).

We often see investing harder than it should be.

Everyone approaches investment differently. The goal is not to lose your hard-earned money so you cannot recover from it.

The important message is to have a process that can mitigate the risk of loss in your investment portfolio.

Therefore, we can always learn to better manage our investment portfolios by reducing the number of costly mistakes we make while investing and moving closer to achieving our financial goals.

Disclaimer: Author’s opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by IlonaCodes constitutes an investment recommendation, nor should any data or content published by IlonaCodes be relied upon for any investment activities.

Top comments (3)

dorshinar profile image
Dor Shinar

I don't think active investing is a good strategy, whether you are an investment shark or not. In the end - it's a zero-sum game.

For example, after careful research you come to a conclusion that you should buy Apple stocks, because you believe it will rise in price. You should buy them from someone, presumably someone who has made his fair share of research and came to the opposite conclusion - Apple stock will plummet and therefore should be sold.

You can't both be right.

I think a much more viable solution is to buy cheap ETF and aim for average interest rate (the S&P 500 average is almost 7% after inflation!)

swyx profile image

The stock market today is the place where the more the price of a stock’s share increases, the more people want to own it.

worth noting that even the indexing movement encourages this as well. don't just blame it all on noobs.

wannabehexagon profile image

I've been follwing you for some time Ilona, and have read quite a few of your posts. I think you have enough content to condense into a quick video or a video series with some fancy diagrams and analytics!