Investing in stocks can be lucrative. If you know what you are doing. Many people speculatively approach stock trading and lose money, though.


If you recognize yourself in the role of a loser on the stock market, don't be ashamed. You are a herd member, buying when prices are booming and manically selling when prices are dropping. Those who collect the cream acts precisely the opposite.

You, as a loser and those "trade masters," are "cooperating" and bringing liquidity to stock markets. Without liquidity, stocking trade would be impossible.

I used to be a loser on the stock market too. It took me almost a decade to learn acting differently. But I didn't learn to be a trade master. I've learned to be in charge of my investments.

As well as myself, deep down in yourself, you know you will never become a trade master. But you don't want to be a loser either. What is that possibility that can guarantee success for you on the stock markets? How do you learn it? Are you willing to adopt it, or you'd like to stay being a loser? It takes an entirely of self-discipline to show. But it's worth trying.

My Story

After almost ten years of my employment, I decided to invest a little in the funds.

The bank where I have my bank account is governing the fund I've picked, and I have confidence in its reliability and competence. They are investing mainly in domestic stocks and government bonds. I've chosen the moderate risk fund, which invests most government bonds and a smaller part in stocks.

Until then, I was not familiar with the stock market at all. Not until I saw a friend of mine buying some stocks and selling them shortly after for 40% more. I was infected. I started to imagine the sums of money I could gain through trading on the stock market. The feeling was nice. I could see myself buying a new flat or even a house in cash, financially independent.

Contrary to these phantasies, dealing with stocks was the start of my financial crash, mainly caused by the housing loan I raised. Luckily, I didn't have much to invest in stocks, so it was not such a weight in the whole story.

Beginner's Luck

I started to monitor daily fluctuations of stock prices on the domestic stock market and reading some introduction materials of Technical and Fundamental stocks analysis. This self-education was superficial. But even though if it would've been more serious, the fact was I didn't know anything about trading the stocks, and I was deluding myself, it was easy.

Buy when the prices are low and sell when they are high. Easy as that. Only I didn't calculate with the psychological effect which experienced traders were very much aware of. Besides, I didn't recognize my limiting beliefs about money. Those beliefs are deep; I know it now. They stopped me from quickly acquiring the money, so I was subconsciously undermining my attempts to earn on the stock markets from the very beginning.

I draw back the money from the fund where I was investing. The fund's gain was minimal compared to earnings achievable by trading the stocks on the individual level. I opened the account at the stockbroker, and I was ready for gambling. I just wasn't aware that I was indulging myself in that kind of a game. I believed I started a serious business, but it was nothing but betting, considering the knowledge and experience I possessed.

It was the year 2006, and everything looked cheerful in the markets. Investments in Croatia were high. Many construction works were going on, and the real estate prices were booming. So were the stock prices. You could not miss, whatever have you bought off the stocks, it was rising, and you could sell it for the higher price shortly after.

As expected, I was recording a success. I was picking the stocks with the highest possibilities for growth, and in short to middle term, those stocks' prices did grow.

My information source was internet forums dedicated to stocks trading where anybody could write anything without any consequences, using a nickname and hiding its real identity.

A few forum users were trying to be objective and did present the objective facts of technical or fundamental analysis they did by themselves. The rest of the users contributed with "this one will rise" or "this one will go down." The forum's users accompanied those claims with constant mutual argumentations between those pro "rising" and those pro "dropping" to the extent of verbal fights in some cases.

Only much more later, I comprehended that many of those forum users were there to pull on others either to buy individual stocks or to sell them. If they wanted to sell their stocks for a higher price, they would yellow how much more potential they have. Vice versa, if they wanted to buy some share for the lower price, they would shout how this share is worthless so that others would sell it for a discounted price to them. I was also sometimes distracted by this conflicting information on the forums, but overall I was in substantial plus compared to my initial investment.

One other common mistake I've seen is exchanging the blue-chip stocks for "more prosperous" ones. A blue-chip share means it is a share of a stable company, has the reputation of quality and reliability, and the ability to operate profitably in good and bad times. Besides, that kind of company pays off its profit, the dividend to its shareholders. People exchanged the blue-chip stocks for volatile ones that were not nearly close to stability and reliability values. But according to forum nicknames, those other stocks had more potential to grow.


The gain I enjoyed in this short term spun my head off, and I decided to invest more money. It was just that this time I decided to invest the money I didn't have. I've raised the margin loan. Meaning that I have deposited some volume of my stocks to the bank, and in return, I've got the equivalent value in the money on my broker account, which I used for trading. I was allowed to trade with the stocks that I've deposited either.

When everything was fine, my obligation was to pay the bank's monthly interests. But in the case of markets go down, and the total value of the stocks you've deposited and the money you've borrowed drops below some contracted value, usually below 70% of it, you get the call from the bank, the "margin" call. Then you have to refill with your own money to at least this given 70%.

Like all of it was not enough for me, I jumped into one more debt. Croatian capital market was still young, and there was just one IPO, Initial Public Offering behind us. IPO is the initial stock public offering of some privately owned company. Stocks are offered to institutional investors but as well often to the general public also. This first Croatian stock market IPO in 2006 was a success, but I didn't participate as I was not sure how it would look like.

The state announced the second big IPO in 2007, and that was when I'd raised the housing loan. I just started to pay off that loan, and everything was still steady in Europe. I had some more space to enter into more debt, and I did it—unadvisedly as always. I raised the non-purpose loan, and I participated in the IPO. Shortly after, stocks I've bought through this IPO grew 10%. I've sold those stocks, but instead of closing the non-purpose loan and left with a plus of 10%, I continued to trade with that money. So I was paying off the non-purpose loan besides the house loan and besides the margin loan.

I picked a few stocks and invested some money in them. That was a good tactic, to have the money spread and not keep all the money in the same basket. The bad thing, though, was that I occasionally decided to change one share for another. I didn't know much about the stocks' technical analysis, which predicts stock prices based on statistics and investors' sentiment. Nor was I studying the stock's fundamentals to discover the real value of the share.

I based my tactic on fear and greed, as for most herd trading on stock markets. Meaning, when the price started to drop, I was selling, being afraid that I will lose everything. If the price was rising, I was buying, being fearful that I would lose my chance to buy for that price ever again and miss collecting the profit.

One more interesting thing to notice here. When was I selling a share which price was dropping, why I didn't sell it before and left satisfied with the gain I already had? Or, in another case, if I was buying a share which price was rising, why was it not good enough for me to buy it when the price was lower? The answer lies in human psychology. Those who are calm enough and who have the will to act against the herd are the winners in this trading game. But most of us are not of the cold head in such circumstances. Trading, or better to say, speculating, is bad business for us.

Despite all of these wrong actions, I was still in plus. It was a plus "on the paper," though I didn't cash it in. Still, I was feeling very confident about it. So confident that I did the most possibly embarrassing act as a consequence of it. And that was talking of my success loudly. It was still ok when I was talking about it generally. But once, I was talking about the specific stock that I've picked up, and that was lucky for me. It turned to be its peak, but I was sure that it would continue to grow due to reading the forums. I was talking about it to my friend. He has bought that share based on my stories and lost the money.


The winning game didn't last for long. With the appearance of the US real estate market crisis and the European Union debt crisis, stock markets in the US and Europe were declining fast and rapidly. The weak and shallow stock market in Croatia was following to an even more significant extent. Instead of selling everything in stocks I had, I stayed paralyzed, watching first my profit and then my initial stake melting in front of my eyes. I was blindly hoping that everything will be all right and that the stock prices will be back on the levels before the crisis.  

But the crisis wouldn't go away so quickly, and when the markets did stabilize in the US and Europe, it didn't happen so with the Croatian stock market. The capital has gone from Croatia, and investments were not back for years after the US crisis.

It was happening simultaneously with an enormous increase in my monthly annuity for the housing loan. And besides the housing loan, I loaded on the margin loan and non-purpose loan to buy the IPO stocks. All of it was unbearable for me to pay off and support the family from my salary income. This situation left no other way to me as a solution but to selling the stocks for the values below purchase price to fill our budget.

I was also continually getting the margin calls for my margin loan. I had to sell the stocks owned outside this deal to cover the holes in it. Finally, there was nothing left to sell, and it forced me to close the part of my margin loan for which I was so stupidly attached. I still kept the piece of margin loan active, despite the bank's advice to close it. They saw that I'm the lost case in trading, but I didn't want to admit it and continued changing share for share and losing money on those transactions.

Finally, pressed against the wall, I closed the margin loan completely. Shortly after, I closed the non-purpose loan and debt on my debit and credit card.

Looking back, I'm not sure how I've survived these four years of horror dealing with stocks in crisis, absolutely not knowing what I am doing. It was tremendously stressful moreover because I didn't talk about it to anyone. I was swallowing the disappointments, living in fear.

Present Days

For a few years after all these unpleasant events, I was clean in dealing with stocks. Some small amount of money left, and I've put it all in one share. I left it there for a year, maybe even two. Then the old appetite for taking a risk and blindly changing a share for share have grabbed me again. I played for some time with this money, as it was not a necessity for me. It was like an old addiction was awaken, and adrenalin flowed in my blood like before.

I didn't add any more money into this game, however. At least that part of the lesson I've learned - not to play with the money I didn't have or that I need.

Still, I was not aware of what I'm doing with stocks and how I should learn. Then, accidentally, following the forums dealing with trading, I've come up with a post mentioning some guru person for stocks on the Croatian stock market. People said that this person is running a blog, and I've looked for it on the Internet.

On this blog, I've learned that real investors take their time to stocks analysis and bring to light its fundamental values. The knowledgeable investors (like Warren Buffet, for example) are not interested in technical analysis, predicting share price movements in the short term. 

By reading this blog and seeing how real everything is in practice what the blog is preaching about, I've started slowly to comprehend the meaning of investing in stocks. Investing in stocks is not jumping from one stock to another. What I was doing was hoping to get quick earnings. On the contrary, investing in stocks is a long term, life learning and self-confidence building skill. Faith in the delayed reward is the key. It's called patience.

I'm out of the trading game for good. It was a long-lasting experience with a bitter taste left in my essence. And it took more than a decade for me to comprehend it. I'm giving a special thanks to my wife, who has recognized what I'm dealing with. She helped me to take control of our finances together. We started with keeping track of our earnings and spendings on a month-to-month basis. Thus, we always know how much money we spend on what. We put aside what is left, and in that way, we follow the simple but powerful compound interest principle. That is the best investment I ever made.

Top Tips

I hope that sharing this experience of trading stocks is valuable if you consider investing in stocks.

Here are the key messages learned after a decade of hard lessons.

  • Do not trade, invest!
  • If you are a total beginner, find someone whom you trust and whose example you can follow. Investing in stocks is not a business to deal with on your own from the beginning. Ignorance can cost you much real money.
  • Have somebody close to you as your relative or a friend who is stable in finances and who is a wise long term stock investor. If you don't know such a person, find a blog or some other source of information you can tell is relevant and know who is behind it, in his or her full name.
  • Read the blog, see what it preaches about and check in real cases if it is true. If you can not prove the blog's accurate information, don't consider that blog to be your info source. E.g., the author of the blog that I have followed announces the price for which he has bought some particular share, writes about its potential, and tracks its progress. Anyone can verify this data.
  • Chose a few stocks in which fundamental values you trust. See if there is a stable developing business behind this company. Verify there is a demand for its products and a plan that is not just the mission and vision. If there is a real elaborated strategic document issued by this company, it is a good sign. It is not enough, though. Pay special attention to the leader of the company. See him/her speaking publicly and read his/her announcements. Ask yourself if this person makes you confident and does what he/she talks about makes sense to you?
  • If you've picked the share and you want to buy it, don't you ever buy it in the moment of either strong growth or substantial decline. Strong oscillations are caused by some positive or negative news of that company or of the market itself. Everybody wants to buy or sell in these moments. It is deeply rooted in human behavior and based on either greed or fear. Stay out of it. Wait for the interest to splash and for the price to calm down. It is essential to see that the price is stable for some period.
  • Once more - don't follow the herd.
  • When you decide to go in, let it be a long term decision. Do not monitor the price every day. Let it mature. Be patient and believe in delayed reward.
  • Do not invest the money that you need.
  • When you invest, forget about this money. No matter how wise you invest, unpredicted circumstances can erase all of the money you've invested. You have to be aware of that fact.
  • Regardless of the above, be positive and confident about your choice. Stick to it and don't care about short or even long-term market shocks like real estate and debt crisis or Brexit. This kind of quakes will always be present on stock markets, but the stock's fundamental value will eventually prevail.
  • If you decide to invest in stock markets, the best advice is to keep the blue-chip stocks. It's the best bet if you want to be an investor and not a speculator. Besides its stable value, in good or bad times, the blue-chip stock brings the dividends you can invest back into the blue-chip stock itself and thus start the compound interest "game." The only game that will keep you calm, sober, and long term satisfied with your investment.
  • And final notice, and most important one. If you know that deep down yourself lies a belief that everything you earn must be earned with your bare hands, stay out of investing in stocks forever. Learn from my example and save yourself from the misery and long term financial troubles.
  • You can still invest following the compound principle by putting aside 10% of your earnings every month and touch it only in case of significant life needs. Within even a relatively short period of a couple of months, it will provide a sense of great financial accomplishment and security.

Part Two  Part Four 

About kristijan galekovic

I'm the founder of ClickIntoLife, a father, a husband, and a nature lover. I'm keen to share my experience and knowledge. I like to read and hike, where I may take a bunch of kids with me. With ClickIntoLife, I want to help you fit better into life and feel comfortable in your skin. Read more about me here.

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