It's been a long time since I bought my first shares. To be precise, it all started on January 23, 2017.
When I look back and think about the shares I bought and sold in the first few months and years and the mistakes I made, it's a bit embarrassing in hindsight😂
But how did it even come about that I decided to take my first steps on the stock market to become the next "Warren Buffett"?
Well, one thing at a time.
Like most of us, I had my first experience with money when I went to the savings bank with my parents and my little sister and opened a savings account with a starting balance of 5 marks.
I can still remember it well when there was a fire at a neighbor's house next door, we had to get dressed quickly and run outside, of course we also grabbed the most valuable thing we had, my sister and I stood there on the street with our piggy banks in our hands, luckily the whole thing turned out well.
We continued to save diligently and our "assets" grew bigger and bigger and we got more and more interest. After years of saving, however, I got weak in 2001 and spent it all on a PlayStation 2, at that time just under 800 marks. Due to vacations and mini-jobs, the savings account got a little fatter again and it wasn't the last "plundering", it was followed by 1500€ for a driver's license in 2004 and 4000€ for a VW Polo in 2005 and I was broke again.
After that I was only interested in the interest and looked for better offers than the savings book and so the first extra account was opened at Ing with just under 2%. For transactions at Ing, I actually had to use a landline phone for the first few years.
When the financial crisis hit in 2008/09, interest rates rose to over 5% and I was able to invest €20,000 for 1 year for an unbelievable 5% fixed-term deposit and was later happy to receive €1000 gross. In hindsight, it was the best time to invest in shares, instead I chased the highest interest rate, followed by an account with DKB and Bank of Scotland. For me, shares were only for gamblers who were constantly buying cheaply and selling expensively and you could lose your entire fortune; the fact that companies could also distribute profits was a foreign concept to me at the time.
I was happy, my savings grew and the interest came regularly. The interest rate continued to fall year after year until I reached 0.01% at DKB and the first reports of negative interest rates appeared.
The constant crises in the media about losing your assets also made me nervous, but in hindsight that was one of the reasons I ended up with shares.
In 2016, I first became interested in precious metals and so I decided to buy 7 ounces of gold and 100 ounces of silver. At the time, I had just under 150k cash and was considering investing further in precious metals. Almost panic-stricken, I looked for alternatives to protect my assets, the real estate was already too expensive for me, although in retrospect they were good deals.
The famous bicycle chain.
So I started looking into shares, mostly through YouTube financial influencers. I read a book about finance years later.
Then I started buying shares in a frenzy. I wanted a high dividend, a healthy payout and a favorable P/E ratio so that I could achieve long-term returns on the stock market. I was fascinated by dividends, interest rates at 0% and Daimler paying a dividend of over 5%? Shut up and take my money, followed by positions in Nestlé and Roche from 🇨🇭und, Engie and Unibail from 🇫🇷. The disappointment was great when the 3% from Nestle only came to 1.5% net, only then did I find out that each country has its own withholding tax.🙈 Fortunately, I was able to sell the aforementioned positions at a profit.
I then continued to invest according to the dividend/cheap P/E ratio principle, and when I bought the position I read the brief fundamental analysis on Finanzen.net 🙈
Dividende✔️Ausschüttung✔️ cheap P/E ratio ✔️
I only came up with the idea of reading the earnings a few years later, which meant that I lost a lot of returns and, for example, an Alphabet, Amazon, Nvidia was simply too expensive according to my strategy. Nevertheless, I managed to buy Apple and Microsoft. With Microsoft, however, the famous P/E ratio came into play again. According to a Youtube financial influencer, the P/E ratio was clearly too high and he sold the position to get in later at a lower price, I decided to do the same🙈
I was also hesitant to put my assets into shares, 50k in the first 3 years, the majority was still in overnight money at 0.01%
The media constantly reported that everything would crash soon, nothing has changed in that respect, it's supposed to come practically any day now. Now when the Corona Crash 2020 came and the world felt doomed and I actually wanted to buy cheaply, I didn't have the cojones to buy strongly. Later I change the strategy to invest the money in the market every month no matter what.
Well, just like in real life, you're always learning on the stock market.
The 8-year share balance sheet is of course all gross
My conclusion after 8 years
- Get to know the company and read the earnings before buying a position
- Don't buy shares just because they pay a high dividend
- A share with a favorable P/E ratio usually remains cheap in the long term
- Back winners instead of turnaround candidates
- Invest regularly, don't wait for a crash
- Never sell a Microsoft.
- Or to summarize briefly, buy a World or S&P500 ETF 😂
Thank you very much ✌️😊
