March 2020. The market crashed, and everyone around me was talking about buying the dip. “This is the opportunity of a lifetime,” they said. “You’ll never see prices this low again.”
I had 4 lakhs saved up – money I’d accumulated over two years of careful budgeting. Instead of leaving it in my savings account earning 3% interest, I decided to become an investor.
Eight months later, I’d lost 2.8 lakhs. Seventy percent of my savings, gone. Not because of the market crash everyone feared, but because of my own stupid decisions.
I’m sharing this not to discourage you from investing – investing is crucial for wealth building. I’m sharing this so you don’t make the expensive mistakes I made. Every lesson I learned cost me real money, and I’m hoping my losses can save you from yours.
I Treated Stock Trading Like Gambling
My first mistake was not understanding the difference between investing and trading. I thought I was investing. I was actually gambling.
Real investing means buying quality companies and holding them for years, focusing on business fundamentals, having a clear strategy based on research, and accepting that returns come over time, not overnight.
What I did was check stock prices every hour, buy based on YouTube tips and WhatsApp forwards, sell when prices dropped even slightly, and chase every “hot stock” people were talking about.
My first purchase was Yes Bank. It had crashed from 300 rupees to 15 rupees. Everyone was saying it would recover to at least 100 rupees. I bought 2,000 shares at 18 rupees, investing 36,000 rupees.
The stock went up to 22 rupees within a week. I was ecstatic – I’d made 8,000 rupees! This was easy money.
Then it dropped to 16 rupees. I panicked and sold everything, losing 4,000 rupees in total after brokerage. The stock later went to 25 rupees, then crashed back down. Today it trades around 20 rupees.
I’d bought purely on hype, with zero understanding of the company’s actual problems. The RBI had placed it under moratorium for serious issues. I didn’t even know what that meant, but I’d invested 36,000 rupees anyway.
This pattern repeated constantly. Buy on hype, sell on panic. Buy high, sell low. The exact opposite of what successful investors do.
Over eight months, I made maybe fifty different trades. Each trade cost brokerage and taxes. Even when I made small profits, the transaction costs ate into them. My Zerodha statement showed I’d paid over 12,000 rupees in charges alone.
The lesson that cost me lakhs: the stock market isn’t a casino or a lottery. Short-term trading, especially without knowledge, is the fastest way to lose money. If you can’t explain why a company is worth buying and why you’d hold it for years, don’t buy it at all.
I Followed “Expert” Tips from Random People
This might be my most expensive mistake. I joined multiple Telegram groups and WhatsApp groups promising “guaranteed returns” and “insider tips.”
One group had 5,000+ members. The admin would post stock recommendations daily with target prices. “Buy XYZ at 250, target 320, stop loss 235.” It looked so professional.
I followed these tips religiously. Bought whenever they recommended, sold at their targets. For the first month, I actually made some money. Small profits, but consistent. I was convinced I’d found the secret.
Then came the big tip. A penny stock trading at 12 rupees was going to “explode” to 40 rupees based on “insider information.” The admin was very confident. The group was buzzing with excitement.
I bought 5,000 shares, investing 60,000 rupees. This was my biggest position ever. I was nervous but excited.
The stock went up to 14 rupees the next day. Then to 16 rupees. I was sitting on a 20,000 rupee profit on paper. I held, waiting for the promised 40 rupees.
Then it crashed. Within three days, it was back to 11 rupees. I was down 5,000 rupees, with the loss growing daily. The group admin said “just hold, it will bounce back.”
It never did. The stock kept falling. By the time I finally sold in panic at 7 rupees, I’d lost 25,000 rupees on that single trade.
Later, I learned this is called a “pump and dump.” The group admins likely bought the stock cheaply, pumped it up through their recommendations, and when innocent followers like me drove the price up, they sold their holdings for profit. We were left holding worthless shares.
I lost money on multiple other tips too. The pattern was always the same – the recommendations worked sometimes to build trust, then the big tip would destroy your portfolio.
The worst part? These groups charged nothing, which made them seem generous. They made their money by manipulating us.
The lesson: never invest based on tips from random people online, no matter how professional they seem. If someone actually had guaranteed stock tips, they’d use them themselves and become billionaires, not share them in free Telegram groups with strangers.
Do your own research. Read about the company, understand the business, check financial statements. It’s boring and time-consuming, but it’s the only way to invest safely.
I Didn’t Understand What I Was Buying
Be honest – can you explain what the companies you’ve invested in actually do? Their revenue model? Their competitive advantages? Their growth prospects?
I couldn’t. I bought Reliance because everyone said it was safe. HDFC Bank because banks are stable. TCS because IT is booming. Some pharma company because COVID meant pharma was hot.
I had no idea what these companies’ actual businesses looked like. What were their profit margins? Who were their competitors? What risks did they face?
When Reliance dropped from 2,100 to 1,850, I panicked and sold, losing 15,000 rupees. If I’d actually understood the business, I would’ve known that temporary drops are normal and the company’s long-term prospects remained strong.
The stock later went to 2,400. My panic cost me not just the 15,000 loss but also the 30,000 profit I could’ve made by simply holding.
I bought a pharma stock at 980 rupees because “vaccines were the future.” It dropped to 720 within weeks. I held onto it for months, watching my 48,000 rupee investment shrink to 35,000, because I had no idea whether this was temporary or permanent.
Eventually, I sold at 750, accepting a 23,000 rupee loss. I later learned the company had failed some drug trials – information that was public and would’ve stopped me from buying if I’d done basic research.
Compare this to a friend who bought Asian Paints at 2,200. It dropped to 2,000 during a correction. He held because he understood the business – India’s housing boom meant paint demand was growing, the company had strong brand loyalty, and margins were healthy.
Today it trades around 2,800. He made 27% returns by simply understanding what he owned and not panicking.
The lesson: never invest in something you don’t understand, no matter how much people hype it. If you can’t explain the business to your grandmother, don’t buy the stock.
Spend time learning. Read annual reports. Watch investor presentations. Understand what drives the business. It’s tedious, but it’s the difference between investing and gambling.
I Thought Penny Stocks Were Quick Money
Penny stocks – companies trading below 50 rupees – seemed like the fastest path to wealth. If a stock goes from 10 rupees to 20 rupees, that’s 100% returns! Way better than blue-chip stocks that might give 15-20% annually.
I bought several penny stocks based on this logic. Each one lost me money.
One stock trading at 8 rupees had “huge potential” according to a YouTube video. The company was supposedly getting a major contract. I bought 10,000 shares for 80,000 rupees.
The stock went up to 9 rupees briefly, then crashed to 5 rupees. Desperate to recover, I “averaged down” – bought another 8,000 shares at 5 rupees, investing another 40,000 rupees. Total investment: 1,20,000 rupees.
The stock never recovered. It bounced between 4 and 6 rupees for months. Eventually, I sold everything at 5 rupees, losing 50,000 rupees on this disaster.
What I didn’t understand about penny stocks:
They’re penny stocks for a reason. These companies usually have serious business problems, weak management, or declining prospects. That’s why the market values them so low.
Liquidity is terrible. When you want to sell, there might not be buyers. I once tried to sell a penny stock for two days before finding enough buyers.
Manipulation is rampant. Small stocks are easily manipulated by groups that pump and dump them.
One successful penny stock pick doesn’t make up for multiple losers. Yes, occasionally a penny stock gives 500% returns. But most go to zero. The math doesn’t work in your favor.
The lesson: avoid penny stocks unless you’re an expert with money you can afford to lose completely. Focus on quality companies trading at fair prices instead of garbage companies trading at cheap prices.
I Panicked During Every Market Dip
Market drops terrified me. When my portfolio showed losses, I couldn’t sleep. I’d check prices constantly, feeling sick watching red numbers.
During one correction, the market fell 8% in three days. My portfolio went from 2.1 lakhs to 1.85 lakhs. I panicked and sold everything, accepting 25,000 rupees in losses.
The market recovered within two weeks. If I’d simply held, I’d have recovered all those losses and been sitting on gains.
This happened three times. Each time, I sold at the bottom of a dip, then watched the market recover without me. Those panic sales cost me over 60,000 rupees in realized losses.
Meanwhile, my friend who barely checked his portfolio rode through the same dips without selling. His portfolio is now up 45% from his original investment. Mine was down 70% before I finally stopped.
The lesson: market volatility is normal. Drops of 10-15% happen regularly. They’re not reasons to sell unless the companies you own have fundamental problems.
If you can’t handle seeing red in your portfolio without panicking, you shouldn’t be in stocks at all. Consider mutual funds where professional managers handle the stress, or stick to fixed deposits where you won’t see daily value fluctuations.
Successful investing requires emotional discipline to hold through volatility. If you don’t have it, you will lose money.
I Didn’t Diversify Properly
At one point, 60% of my portfolio was in three stocks – all in the same sector. When that sector corrected, my entire portfolio crashed.
I thought I was being smart by “focusing” on sectors I believed in. Actually, I was taking massive unnecessary risk.
When COVID hit aviation, I had positions in three airline stocks. All three crashed together. I lost 45,000 rupees across those positions.
Diversification means spreading investments across different sectors, so if one sector struggles, others might compensate. It means owning 12-15 stocks, not putting everything into 3-4. It means including both growth stocks and stable dividend stocks.
I didn’t do any of that. I put too much money into few stocks, often in similar sectors.
The lesson: don’t put all eggs in one basket. Spread investments across sectors and companies. If you’re not sure how to diversify, index funds do it automatically.
I Ignored My Own Financial Situation
Here’s maybe my biggest mistake: I invested money I couldn’t afford to lose.
That 4 lakhs was my emergency fund. It was meant for job loss, medical emergencies, or unexpected expenses. Instead, I put it in the stock market chasing returns.
When I lost 2.8 lakhs, it wasn’t just a portfolio hit. It created real financial stress. I had no emergency buffer. An unexpected medical bill or job loss would’ve destroyed me.
I also used money I needed within a year. I invested 1 lakh that I knew I’d need for my sister’s wedding in eight months. When that time came, my investment was worth 62,000. I had to borrow money to cover the shortfall.
The lesson: only invest money you don’t need for at least 5-7 years. Keep 6-12 months of expenses in a savings account or liquid fund as emergency money. Never invest money you need within 1-2 years.
Stock markets are volatile short-term but grow long-term. If you need your money soon, you might be forced to sell during a downturn, locking in losses.
What I’m Doing Differently Now
I spent eight months making mistakes and 70,000 rupees. But I learned, and I’m rebuilding my portfolio the right way.
Now I invest only in companies I understand after thorough research. I hold investments for years, not days or weeks. I ignore daily price movements and market noise. I have a diversified portfolio across sectors. I invest only money I won’t need for 7-10 years. My emergency fund is separate in a liquid fund.
I invest systematically – same amount monthly through SIPs in index funds and few quality stocks. I read annual reports and business news to understand my investments.
Most importantly, I accept that investing is boring. It’s not exciting trades and daily profits. It’s buying quality businesses and letting them grow over years.
My portfolio is still recovering. I’m down overall, but I’m building back with knowledge instead of gambling.
Should You Invest in Stocks?
After losing money, would I recommend stock investing? Yes, but with massive cautions.
Stocks historically give better returns than fixed deposits or gold over long periods. Investing is essential for building wealth and beating inflation. But only if you do it right.
Start with index funds or mutual funds if you’re new. Let professional managers pick stocks while you learn. Invest small amounts initially – maybe 5,000-10,000 monthly. Learn from small mistakes, not lakhs of losses.
Read books on investing. I recommend “The Intelligent Investor” and “One Up On Wall Street.” Understand basic financial statements and ratios. Take time to learn before putting serious money in.
Never invest money you can’t afford to lose. Never invest based on tips or trends. Never panic sell during market dips.
The stock market isn’t a get-rich-quick scheme. It’s a long-term wealth building tool for patient, educated investors.
The Real Cost of My Mistakes
I lost 2.8 lakhs directly. But the real cost is higher when I consider opportunity cost.
If I’d invested that 4 lakhs in a Nifty 50 index fund and held it, it would be worth around 5.6 lakhs today based on market performance. Instead, I have 1.2 lakhs remaining.
The difference – 4.4 lakhs – is the true cost of my mistakes. Nearly four and a half lakhs gone because I thought I was smarter than the market.
That money could’ve been the down payment on a car. Or funded a certification course. Or been a solid emergency fund.
Instead, it’s gone, and I’m starting over.
Final Thoughts
If you’re thinking about investing, learn from my expensive mistakes. The stock market rewards patience, discipline, and knowledge. It punishes greed, emotion, and ignorance.
Don’t be me checking prices every hour, following random tips, panic selling at losses, buying penny stocks, and treating investing like gambling.
Be the boring investor who researches thoroughly, invests for decades, ignores market noise, and focuses on building real wealth slowly.
Your portfolio will thank you, and your bank account will too.
I wish someone had told me all this before I lost 2.8 lakhs. Now I’m telling you, hoping you avoid the mistakes that cost me so dearly.