Key insights
- A 23-year-old investor recounts underperforming the market since 2021 due to hype-driven investments and a significant loss from a single stock. Despite some success with 'Magnificent 7' stocks, overall returns are negative. Now employed and seeking advice on improving investment strategy, particularly whether to switch to index funds. The post reflects potential retail investor losses and disillusionment, which could marginally dampen market sentiment.
Not my proudest achievement.
For context, I started investing in early 2021 as soon as I turned 18 (I’m 23 now). I had a great job at that time, and was able to put a nice chunk into my investment account every month.
I made the same mistakes that many newbies make - chasing hype, improper research, following others. The real killer was a “high conviction” play I made, eventually it reached 50% of my portfolio, and it went into Chapter 11 after a few years. I wiped out a huge amount of my portfolio.
I went to university a year later, and my investment account remained mostly stagnant as I wasn’t working much. I became a bit wiser with my investing over that time, and in 2022 I invested a chunk of cash I had in some Mag 7 stocks.
They did very well, I sold out of them back in 2024 to pay for my first car. Despite this, I still haven’t recovered from my losses at the start. Apart from those 1 or 2 years, I have consistently underperformed the market. Meanwhile, I have some friends who reach out asking for my insights on certain stocks, as I’ve often posted my research and it clearly comes across as comprehensive to them. They don’t know my performance is beyond poop :)
The good news? I’ve just started a new job and will be able to put aside about $800 a month to invest (based in the UK).
I’m 23 - in some years I’ll be looking to buy my first home etc, so I think it’s really time to sort myself out. How can I not screw it up this time? I’ve always chosen my own stocks (evidently, not very well), is it really a case of just going for index funds and calling it a day? If so, how do you go about choosing the right ones?
Any and all advice welcome. Thanks!