"If you grew up without financial security, you’re that much more reluctant to get rid of cash at hand." - Katie Perry VP of Marketing at Public.com
Hi friends!
Thank you for taking the time to read the post from two weeks ago. It was received well and it motivated me to keep writing. (If you are new and didn’t read the article from last week you can find it here.) I hope it encouraged you to take a leap and start investing or revisit your investments and invest more. Whatever you decided, please shoot me an email and share with me what you invested in, what platform you are using, and if you didn’t then what is holding you back. I actually got my sister to sign up and invest in Stash. I was so proud. She bought some Disney stock (they say to invest in the products you use).
I recently watched a discussion held by Public and HerCapital on the thought process and analysis required when deciding to invest in specific companies and stocks. If you want to view the talk you can see it here. One of the panelists said the below quote and it really resonated with me and I wanted to share it with you.
“We are so terrified of being broke that a lot of our decisions are based on financial security. Being an investor is being able to walk away from any toxic relationship in your life. Being an investor empowers you to walk away from any situation that doesn’t serve you.”
Those are such powerful words to me and really strike at the core of why I am aggressively investing now. I want to eventually gain financial freedom and be able to take month long vacations and not work myself to exhaustion. I want to be able to take my mom on a nice vacation and feel confident that I can afford it. And in the long term of course, I want to be able to have enough money to comfortably retire. (We will talk about retirement accounts in the upcoming weeks.) What do you want to gain from investing? I want to hear so definitely share with me.
I will say it again and repeat it until I turn blue in the face…but compound interest is your friend and if you start now, before you know it your bank account will be stacks on stacks on stacks… (If those lyrics sound familiar it’s because they are from a 2011 Soulja Boy song and I linked it here for viewing pleasure… you’re welcome.)
Here is a link to an investment -> calculator if you want to plug in numbers and visualize yourself ten years from now on a beach drinking Mai tais in your own private villa with all the money you made from compounding interest.
Anyway, let’s dive more into stocks & funds and how to pick them. For starters, when
I had first started investing, I would read the words BULLISH and BEARISH a lot and literally had no idea what they meant. Of course, I googled them but I always got them mixed up so here is how I remember them now.
A bullish investor, also known as a bull, believes that the price of one or more securities will rise. Sometimes a bullish investor believes that the market as a whole is due to go up, foreseeing general gains.
A bearish investor, also known as a bear, is one who believes prices will go down. As with a bullish investor, investors can be bearish about either the market as a whole or individual stocks or specific sectors.
To sum it all up, a bull is optimistic and a bear is pessimistic in their predictions of the market or specific stock. If you want to read up more on the terms and their history you can read here.
When you start doing research, it is important to read both the positives and negatives and then make your own decisions. Take into account both sides and if the negatives outweigh the positives then don’t make the investment but if you see more upside in a company and believe in their future then I would say go for it… again this is not financial advice just my personal approach.
So how do you pick a stock/ETF fund? Well, look at current or emerging trends in our world today. What products are you using? What products are your friends and family using? What is the chatter on the news or twitter? Since mid-March, pandemic travel has been notching record highs, with over 1M people passing through TSA check points each day. "Revenge spending" outside the home on things like vacays, concerts, dining, and (non-stretchy) clothes could be coming. These are stocks in industries that tend to do well when the economy is growing (and vice versa). Think: travel, construction, retail, and banking. Consumer spending tanked in 2020, but it’s expected to spike in the summer and fall. As life slowly returns to semi-normalcy, we're seeing leading indicators of the "revenge spending" economy.
My advice would be to make a list of what sectors and companies interest you and what companies believe will continue to grow. Then pull up your investing app and do some research on all the different companies/funds and how they have performed in the last 5 years. Keep in mind that last year took a huge dump on all companies but take note of which ones bounced back and where they are now. If there is a consistent upward trend and you believe in the company then it is worth considering investing in the stock. The beauty of it all is that you can start as small as you want and with time increase your investment. The point is to make it a habit to become actively engaged with your portfolio.
If you want to minimize your risk then instead of investing into one stock you can invest in an ETF (which stands for Exchange-Traded Fund). You are essentially buying into a whole a whole collection of different stocks (or bonds, etc.). But more than that, an ETF is like investing in the market as a whole, rather than trying to pick individual “winners” and “losers.” There are a few advantages to ETFs, which are the cornerstone of the successful strategy known as passive investing. One is that you can buy and sell them like a stock. Another is that they're safer than buying individual stocks. One company's fortunes may go down, but it's less likely that the value of lots of companies will be quite as volatile. It's even safer when you invest in a portfolio of several different types of ETFs, so that if one part of the market goes down, you'll still be invested in other parts. ETFs also have much smaller fees than actively traded investments like mutual funds.
I personally have invested in both individual stocks and ETFs. I’m bullish on Tesla (even though Elon Musk is pretty crazy and unpredictable). However, the technology and innovation of Tesla is pretty incredible and I’m holding on to that stock for the long term. I have it set to a small weekly recurrent investment to continue to accumulate shares.
As far as ETFs go, my best performing funds that I found on Stash are Home Sweet Home, Delicious Dividends, Data Defenders, Match the Market, Women Who Lead, and Retail Therapy. I also just added to my mix a video game ETF since I believe e-sports is slowly taking over the world and its projected market revenue will reach almost 1.62 billion U.S. dollars in 2024. I will let you all know how that fund works out.
In the spirit of keeping a diversified investment strategy, I have also started looking at cryptocurrencies. A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds. Bitcoin is the name of the best-known cryptocurrency, the one for which blockchain technology was invented. There are also a ton of altcoins some of the most popular ones you might have heard of are Etherum, Dogecoin, etc. An atloin is basically anything you buy other than Bitcoin. You can view all of them and their daily prices at Coin Market Cap.
If you have a riskier spirit and want to take a wild dive into the world of crypto investments, the two platforms I have found the easiest to use are Coinbase (set to go public next week) and Etoro.
The world of crypto is a whole other beast and I just started my journey so if you are interested or also investing in crypto shoot me an email! We can further discuss our successes, predictions, and failures.
And last but not least I purchased my first NFT this week!! You can see my proud purchase here. And if you don’t know what an NFT is… (don’t worry I still don’t quite understand it). SNL did a really funny skit trying to explain what it is …. click here to watch it… or if you want a good article to try to understand the concept better check it out here.
I also tried two different investment platforms this week Ellevest and WeBull. I’ll share what I liked and disliked in the upcoming weeks.
There are so many newsletters and resources available on the internet that it can be overwhelming and daunting to decide what you want to dedicate your time to. I am humbled and grateful that you trust me and chose to spend some of your week/end reading my words. Please, if my content ever stops being useful let me know so I can talk about things that will actually help you.
To everyone that has reached out and kept the conversation going by sharing your story or resources thank you! Until next time, stay safe and invest.
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