Dinah Wolf: investing lessons I’ve learned in 2021

It’s that time of year when our Gen Z columnist reflects on a year gone by, all the investments that went well and those that didn’t, and whether it’s time to change her investing behaviour in 2022.

It’s been a bonkers year in investment land. From the maddening rise of ‘meme stocks’ (hello, GameStop (NYSE:GME)) to bitcoin’s big bounce, I think it’s safe to say we’ve seen it all. If someone had told me a year ago all this would have happened, I’d have laughed in their face. Yet, if this past year has taught me anything it’s that the unthinkable can happen. So, be prepared for the impossible and the unimaginable in 2022. 

We’ve watched (and hopefully joined in) our big American cousin’s bull run because ours was sadly more snail than beast-like. Yet, while this party was well and truly under way, inflation was secretly brewing. It was so quiet last year that it didn’t quite make the headlines but now, well, it’s all anyone’s talking about!

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It has been quite the journey for me, too. It was around this time last year that I really began investing heavily in the stock market, which is why lounging around in PJs and watching Christmas classics isn’t the only thing I’ll be getting up to over the festive break.

Lessons learned

I’ll be mulling over the (investment) year gone by which means one thing – time to dig into what I could have done better. Because, while my lovely little nest egg is growing nicely, I’ve made some mistakes along the way.

The hardest lesson I’ve had to learn is the importance of holding some cash for when opportunities arise. I was too cash-strapped to fully enjoy the stock market’s clearance sale of March 2020, which meant I had to wait a full seven months until I was able to pounce on the leftovers.

See, the top 1% always have a nice chunk of their portfolio stashed in cash and, if they don’t, then they certainly have access to it, and fast! And while I’m not quite in that bracket, I can always use some of their tricks. And I’ll certainly be nicking this one.

So, as the new year unfolds, I will be focused on building up a cash buffer so that I can take full advantage of any sales that come my way. After all, asset prices (from houses to stocks) have pretty much hit all-time highs. This can definitely keep going for a whole lot longer, but it’s not such a great feeling knowing you’ve bought right at the top.

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I’ve also learned the importance of not having all my eggs in one single basket. When I started investing, I had a nice amount of inflation-busting stuff. You know, the property and commodities stocks. What most might call boring. But when I saw all that growth take off, I was kinda bummed that I hadn’t loaded up more heavily on Scottish Mortgage (LSE:SMT). But now I’m ever so grateful that my money is spread across many different regions – not just the snazzy States.

There are so many reasons to be uncertain. No one really knows for certain what’s happening with inflation, interest rates or anything else for that matter. But what is certain is uncertainty itself. So, enjoy the journey as much as the destination, remain optimistic and learn to take the highs - and the lows.

Cheers to a healthy and happy 2022!