How I got a 21% return on investment by investing in the NSE equity market without any experience

The coronavirus has affected all of our lives adversely in some way or another, unless you've been living under a rock of course. In which case I'd advise you to go back and stay there. Attain nirvana or something.

Anyways, one thing the virus has taught a lot of people is the need for financial awareness. We've seen a wave of amateur retail investors in the equities market booking nice profits. I was lucky enough to be one of these people. I remember the first day I opened my demat account and threw all my life savings into the most random list of companies. I had a 20-spread portfolio and was proud of what I'd done, even though I was completely clueless about the financials of those companies. I started the game as a reckless gambler out of sheer boredom.

Based on a bunch of videos and articles I read, I came to the conclusion that holding was the way to go. So I held this through red and green for about 2 months. Meanwhile I kept learning more about the markets online. Eventually I grew restless and planned to sell high and buy low. And that's how I learnt about trading without ever seriously considering it.

Whenever I heard the word 'trading' in the past, I used to associate it with gambling, mostly because of social indoctrination. I still consider it a gamble (I consider every movement an organism makes a gamble), but the odds are a bit more clear now.

You can't be impulsive when investing or trading. Whenever, I'd exit a position, I'd have this itch to re-enter a winning position. FOMO. I've seen my positions dwindle the very next trading session and I'd have a heavy heart. I also thought of targeting stocks that were about to pay out dividends. Enter a stock, get the dividend, exit. Dick move, but employed by several investors. 

This particular Swedish ball-bearing company caught my eye. They were offering 8% dividends. That's crazy I thought. So without a passing thought I jumped and dumped all my holdings and bought in this stock at a premium. You'd think I would have gotten smarter after a while. Nah I'm pretty dumb.

I knew about ex-dividend dates. I didn't know to receive special dividends you'd have to hold for a particular period as well. I didn't even consider T+2 settlement and its implications. Everything slipped my mind in a flash of greed.

I started seeing the stock falling day after day. I panicked. I started reading forums and realized high dividend stocks tend to see obscene corrections post ex-dividend date. I had lost about 5k INR and was willing to accept the loss before it fell further. I made an after-market order to sell all my stock in the company.

The next day, the order got executed and to my surprise, I made a 2% profit on my investment. Some angel out there bought my stock at a premium for me. Dumb luck. But I knew I couldn't rely on dumb luck anymore.

I chose 2 companies with solid financials and invested in them. I trade in them regularly to book profits on falls. I'm still looking for that balance between trading and holding.

Most importantly I've learnt a lot. I was practically financially illiterate before the virus, and I consider this experience to be more valuable than the massive chunk of trivia I picked up in school. I even thought of the early losses I had as tuition fees.

I got lucky. Most retail investors like me did. And I'm sure plenty of us acknowledge this today.