As someone who has been investing in ASX shares for many years now, I have fortunately had a few successes. But I have also, unfortunately, had a few stinkers as well.
I don't wish I could take these back in hindsight because every mistake is a lesson that stops us from making bigger mistakes (with more money) down the road. But that doesn't mean that I don't still regret some of my mistakes. I'm only human, after all.
So today, I'm going to discuss one of my biggest regrets when it comes to an ASX share buy. Hopefully, you can learn the same painful lessons that I did, without the money-losing part.
The mistake in question was buying shares of WAM Global Ltd (ASX: WGB). WAM Global is a listed investment company (LIC) run by Wilson Asset Management (the WAM).
It only launched in 2018, and I was one of the buyers who participated in the initial public offering (IPO). Why? Well, I had an idea that WAM was a successful asset manager, thanks to the high dividend yields offered by some of their other LICs like WAM Capital Ltd (ASX: WAM). Not to mention a slick marketing campaign.
So WAM Global IPOed for $2.20 a share in June 2018, and I was now a new owner of this company.
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Breaking down one of my biggest ASX share buy regrets
Unlike most WAM LICs, WAM Global invests in companies from outside the ASX, as its name implies. I was excited by the ambitious scope of this project.
But after a while, my faith was fading. It wasn't just that the WAM Global share price fell at IPO and continued to fall. Perhaps WAM was overambitious when it came to its asking price. Either way, it didn't take me long to start racking up my first paper losses. By the end of 2018, WAM Global shares were under $2 each.
But that wasn't why I was starting to question my decision. I am patient when it comes to waiting for an investment thesis to pay off. What I had little patience for was a lack of transparency.
WAM Global rarely discussed its actual shareholder returns. What it did discuss was its portfolio's underlying performance, which is not the same thing when it comes to an LIC. But even that did not account for the liberal management fees I, alongside other shareholders, were paying.
I had to go digging to find out that WAM Global charges its shareholders an annual management fee of 1.25% per annum. Which is not reflected in its portfolio performance metrics.
Late last year, I sold out of my WAM Global shares. I wish I had done so sooner in hindsight, but I still crystallised a loss on my original investment. I think I may have broken even after accounting for the dividend returns. But even so, this is after more than four years of holding those shares. Thus, we get to the conclusion of one of my biggest ASX share buy regrets.
I would have done so much better just owning an index fund. That way, I could have gotten some decent returns and paid a far more appealing management fee of under 0.1% per annum in doing so. Heck, I probably would have been better off keeping the cash in a term deposit.
But you live and you learn. Yesterday, WAM Global closed at $1.87 a share. I'm certainly glad I didn't wait any longer than I did to wipe my hands off one of my biggest investing regrets.
