13 Personal Finance Experts Share Investing Lessons Learned

If you’re one of the millions of people getting serious about your finances, check out 13 personal finance experts’ lessons learned.

Investing Lessons Learned To Prepare For The New Year

If there’s anything we learned in 2021 when it comes to investing in stocks, bonds, and real estate, it’s that yet again, the markets can prove to be unpredictable, defy logic and offer surprises around every corner. Sometimes we can correctly anticipate what’s coming based on our past investing experience. Other times, we’re reminded no matter what we thought we knew, the market always knows better.

For these reasons, it’s important to remember we can always become better investors, whether we’re learning lessons the hard way, reminded of lessons we previously learned, but perhaps forgot, or learning from the experience of others.

In this article, we’re sharing insights from personal finance experts in the Wealthtender community and the lessons they learned in 2021 to help all of us make smarter investing decisions in 2022 and beyond.

Have a (Financial) Plan

I am Larry Sprung the Founder and Wealth Advisor of Mitlin Financial. These past few months should be a reminder to “have a plan.”

A financial plan is paramount to a family’s financial success. During periods of volatility we often hear that investors should “stay the course”, but what does that mean? Is there a course to stay without having a financial plan? We feel that there seems to be a misconception that having an investment game plan is synonymous with a financial plan, and it is not.

Financial planning, having a plan, is so much more than investments and should address areas such as retirement planning, estate planning, education planning, risk management, asset allocation review, and cash flow planning.

Remember the Benefits of Dollar-Cost Averaging

I’m Theresa from In The Game Investing. 2021 proved over and over again that dollar-cost averaging is one of the best investment strategies of all time. Lots of people were talking about a pullback. But the S&P 500 had more than 50 all-time highs.

The reality is, you can’t time the market. Get in the game and stay in it. Focus on buying quality companies that you love and want to keep for at least 10 years.

There are Opportunities in Any Market

I’m Rachel from Adventures in Mobile Homes. One investing lesson I learned based on the way the markets behaved in 2021 is that there are opportunities in any market.

As a mobile home investor, usually, I tend to sell the homes I have on the market using a lease with an option to purchase to potential end buyers. Usually, this involves taking an option payment and receiving monthly payments in the form of rents for the lease portion.

Though, the real estate market in 2021 became a seller’s market even for the mobile home industry. So, I ended up selling a mobile home I had on the market for $40,000 cash in two weeks. This was a reminder that opportunities can be found in any market whether it be up or down.

Adapt Your Portfolio for Inflation

I’m Linda, founder of TheCentsofMoney.com. The financial markets in 2021 have been strong, making new highs often, remaining volatile but vulnerable to higher inflation.

The investing lesson of 2021 is that you can’t fight the rising prices at the grocery store or gas pump but you can and should adapt your investment portfolio by trimming some tech stocks, adding to financials, and finding inflation-protected securities like the Series I Savings Bonds, TIPs, and variable muni bonds as sweet spots for higher inflation.

Get Multiple Bids for Real Estate Investment Projects

I’m Dr. Cory S. Fawcett from Financial Success MD, a retired surgeon who retired on real estate investment cash flow. In the spring of this year, I needed to get my 31 unit apartment complex painted.

The bid I got from a recommended painter was for $90,000. At that price, my wife and I could have painted it over about 2 months and made about $40,000 a month. We contemplated that option.

I decided to get two other bids and they both came in just over $30,000. Had I taken the first bid, I would have made a $60,000 mistake. I looked at some other bids and counted $186,000 I saved by not taking my first bid. The lesson I learned is to always get three bids for major projects on your investment real estate or it will cost you a small fortune.

Buy and Hold

I am Prakash, the founder and author of the Dividend Power website. The US stock market has been strong in 2021 as momentum from 2020 continued into 2021.

I learned that overvalued markets can even get more overvalued. However, if investors had taken money off the table at end of 2020 they would have missed around 30% or more gains in the S&P 500 Index and NASDAQ.

It shows the importance of staying invested and staying the course.

Build a Cash Pile

Hi there! I’m Jeff, founder of Financial Pupil. The investing lesson I learned in 2021 is to always have some cash on hand to take advantage of market dips and pullbacks.

If you happened to be short on cash at the start of the year and failed to invest, you would have missed out on almost 30% worth of gains on your capital! Be it selling photos to make money, or doing freelancing work, or even taking on a second part-time job, having spare cash on hand to invest is really important to ensure that you don’t miss out on potential gains in the market.

Keep Your Portfolio Diversified

I’m John from Financial Freedom Countdown. One investing lesson I learned from 2021 is that macro factors can rapidly change, impacting your portfolio. Stocks with higher anticipated growth potential dropped over 70% since last year while the index continued to hit all-time highs.

Inflation kicked to the highest levels, yet gold did nothing in the best environment where it was expected to outperform. Instead of figuring out the best assets to buy, investing across various asset classes is always advisable based on your risk tolerance and goals.

Index Investing on Autopilot

I’m Jeff from Have Your Dollars Make Sense. My investing lesson is that no matter what is going on in the world and what everyone thinks, no one can really predict the market. People can guess and speculate all they want, but at the end of the day, everyone is guessing.

With that in mind, a good investing strategy is to simply pick a few index funds and put the investing on autopilot. You might miss on some bigger gains, but your losses will be much smaller too.

Image Credit: Unsplash.

Maintain a Disciplined Investment Strategy

Hello, I’m Jeremy, founder of Modest Money. My biggest investing lesson from recent events is that there will always be winners, even in a down economy. We saw this with stocks like ZOOM and Roku as they surged during the pandemic.

The problem is that most of us can’t predict these wins until the opportunity has already passed. Hence, for most investors, we recommend investing strategies that have stood the test of time rather than trying to predict winners and losers.

Invest in Quality Companies

I’m Derek from Engineer My Freedom. The biggest lesson I have learned in 2021 is that I made an investing plan for a reason, and I should stick to it. The stock market has always been unpredictable in the short term, and, likely, it always will be.

As a dividend growth investor coming out of the pandemic, it was easy at times to have FOMO based on the returns some of my growth investor friends were making.  Every company seemed to be going up exponentially, while my boring dividend stocks rebounded a little slower.

I remember selling Disney at $120 after a dividend cut, and lots of people were telling me I made a mistake as the company quickly jumped to $190.  Instead, I bought Royal Dutch Shell at €11 that now sits at €18 and still pays a healthy growing dividend.

I was reminded this year that dividend growth investing suits my investing style. I don’t have to watch the market and worry about short-term fluctuations.  While there may be times when I underperform the market, there will be times when I also outperform the market. So the best thing I can do is stick to my long-term plan of buying quality companies every month and forget about how everybody else is performing.

We talk about some of our lessons learned in this podcast episode.

You May Want to LEAP

It’s Jay from Money Knock. The biggest lesson learned in 2021 is utilizing the power of LEAP options (long-term options) during a bull market.

It can be a great tool to supplement a portfolio if not allocated correctly. I just released an ultimate guide on LEAP options for those who wish to learn more.

Knowledge is Power

I’m Kristy from Money Bliss. Every day there is money to be made in the market. While there are many different perspectives on active trading vs long-term investing, I have learned to enjoy active trading in 2021.

Unfortunately, too many novice investors try to trade stocks or ETFs without any investing knowledge. So, you cannot blame the market for your mistakes. You need to learn how the markets move and work in any market environment.

What Investing Lessons Have You Learned This Year?

As you periodically revisit your investments in stocks, bonds, and real estate, keep these insights in mind to help you formulate your own conclusions on the best moves for you to make to achieve your investment goals.

And if you’re interested in a helping hand, consider hiring a financial advisor who can work with you to build a diversified portfolio and personalized plan to achieve your investment goals.

This article was produced by Wealthtender and syndicated by Wealth of Geeks.