My desire to dabble in direct equity investments is not new. I also know that direct equity investing is not a good fit for me. Despite knowing this, the desire for direct equity investment hasn’t fully vanished.
Rather than fighting the urge, I decided to give in. That’s usually how I roll. I just give in to the temptation and see for myself. Either I end up liking it or I come away with the understanding that it’s not as attractive or beneficial as it once looked.
If I am going to invest in direct equity, well, I might as well learn about it first. So I subscribed to Value Research’s Wealth Insight magazine. A part of me was afraid that I may end up risking too much of the family money in this direct equity experiment, but I marched on anyway. I have been reading the magazine for a few months now and learning.
Contraty to what I was expecting, I am picking up more and more signals and reasons for not investing in direct equity! Jan 2024 edition of the magazine has a story listing common mistakes investors tend to make. The following screenshot is one mistake from the list:
The moment I read this, I remembered my bias towards holding on to my employer’s shares. I was (and still am to some extent) of the belief that holding on to my employer’s RSUs—which have grown much more rapidly than S&P 500—will make me rich. “No tree will grow to the sky” is the advice I had to see to remind myself that no one company is going to be infallible forever.
A few months of learning has not made me give up on direct equity, but I am not madly in love with that idea anymore. Learning about direct equity investing has made me more aware of the risks and nuances involved. I am in a better place than I was a year ago.
No comments:
Post a Comment