My WORST Financial Mistake of the 2007 Calendar Year Was...
As 2007 draws to a close, lets take a moment to reflect on what we have learned by highlighting our mistakes. We all make them, there are no exceptions to that rule. The only variable here is how big of a mistake was it.
I'll start. My biggest financial mistake of 2007 was going against my good friend David Gordon's advice and jumping into the options market without adequate knowledge or experience. Instead of sticking with my bread and butter of stock trading (short and long term), I wanted to test my luck in the options market. To my shock, I have never seen so much money lost so quickly from my portfolio. While I did have a couple triple digit percentage winners, I also had a couple options expire to the worthless state.
The real shocking thing was that I had picked winning stocks, but in the game of options, you need not only winning stocks but also winning time frames. This is where I fell short and the lesson was learned. You see with options, you need not only to pick the correct price, but also the correct time frame. My investment strategy doesn't look at time frames but rather stock behavior to determine my buy/sell points. While time is also an important factor when I trade, to limit my forward looking time frame was something I wasn't comfortable with from the beginning. None the less, I jumped into the options market against my better judgment.
My lesson was learned the hard way as the option market, while good for some, is not for me. So now I ask what is your biggest financial mistake of the year? Was it a bad investment, poor purchase, not recognizing a financial scam, not saving enough or all the above? I will be very interested to hear what the readers of 22 have to say. Too much these days I read on other financial websites/blogs how fabulous they are (over emphasizing the good) and how they never made a mistake (down playing or never mentioning at all the bad). While this kind of behavior can be expected on the web, it gets old after a while, so lets hear the flip side so we can learn from each other's experiences.
What was your biggest financial blunder this year?