Tag Archives: NYSE:MCD

1 Investing Mistake You Want To Avoid And 5 Lessons Learned

There are so many investing mistakes an investor can make. So, it’s helpful to see the mistakes others have made and learn a lesson or a few. 

One investing mistake I’ve made time and time again was booking profits on solid stocks. Some investors believe it’s not wrong as long as you make money. I agree there’s some truth in that but not the whole truth. (I’ll elaborate at the end of the article.)

There was a number of reasons why I booked profits, and I’ll illustrate with the examples below why I was wrong. 

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The Stock Got Too Expensive?!

I sold out of Royal Bank of Canada (TSX:RY)(NYSE:RY) in August 2016. At the time, I thought the top Canadian bank was close to fully valued and I expected to be able to buy the stock back at a lower price.

From my selling point, the stock went on to deliver total returns of about 12%. What’s more? Fast forward three years, RY stock looks fairly valued to me right now trading at about 11.6 times earnings at about CAD$102 per share. 

Lesson Learned: In your lifetime of holding quality stocks, for sure there must be times in which they become undervalued, fairly valued, or overvalued. If your goal is to build a solid portfolio and use stocks, such as Royal Bank, as stable foundation stocks, you should aim to buy when they’re fairly to undervalued and hold for a long time. 

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