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Making money is often about what you know and how educated on a certain investment you might be, but timing has a lot to do with it as well. While I always look into whatever I am putting my money into, there have been times in my past where I was simply financially in the wrong place at the wrong time.
Dot Com Boom and Bust
I became a financial advisor in December of 1999. At this time the stock market was enjoying a rather illustrious boom. For the entire first year of the new millennium it was almost impossible not to pick winning stocks. However, that all came to a screeching halt in early 2001 as the stock market began a crash that will not soon be forgotten. The many dot coms that ran the stock market up also attributed to some massive losses for both my clients and myself. Although I steered clear of a lot of the dot com stocks, when the market tumbled "they threw out the baby with the bathwater."
Real Estate Market Crash
In another ill times move I bought my first home in late 2005, which proved to be just about the peak of the real estate boom. While the first few months were much like the previous few years and saw my home appreciate in value, the appreciation stopped in a hurry. Before too long I found myself upside down in my home as I owed more than it was worth. To add fuel to that fire I went through a divorce in 2007 that saw me have to sell that house and take a huge hit in doing so.
Lessons in Losses
Even though those two particular bad timing situations cost me quite a bit financially I have been able to learn some lessons from the experiences. The first lesson I have learned is that there is no way to predict what any market will do. I feel with enough insight and research I may be able to get an idea of what is going on, but I certainly won't ever be able to know with 100% certainty.
Looking back at both of those situations I remember how everyone was clamoring about that particular market at that particular time. In 1999 I was getting stock tips from a pressure cleaner. In 2005 I had a school teacher telling me I had to own a home because values would never stop rising. So, additionally I've learned that the masses in general are wrong and that I should only invest in something if I feel it is the right move. Otherwise, I might once again find myself financially in the wrong place at the wrong time.
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