The purpose of this blog is to document my thrust into the world of investing. As a 20-something female with mediocre income, faced with the prospects of a variable 1% APY savings account versus much higher-interest student loans, I decided to take my earnings, and my future, into my own hands. Now, as my knowledge of economics is limited to my high school microeconomics class, I know very little about the world of finance. This blog is not about being an expert in investing, but about my lessons learned, my gains and losses, and an openness and honesty about my experience.
I bought my first stock on March 3, 2010. According to where the numbers stand today, I have successfully made more than 30% on the money I've invested since then, including trading fees. I'm really proud of that number, though I know that I may not walk away with this much in the end. As my mom tells me, you can only say that you've made money when you've sold the stocks and walked away. I take this to heart and I think it's a critical point to remember. When to buy, when to sell...I don't know how short sales, options, or any of the fancy stuff works...and I don't know that I ever want to. I'm not interested in betting that a company is going to fail, or getting into matters more complicated. I view an investment as a statement of faith in the future, and I think it means putting money toward something you believe in. By the way, faith (in anything) is always a gamble, with varying odds on return.
I remember that first day, depositing a whopping $2,000 into a new Scottrade account. It was a big moment for me, and I consider $2,000 a huge sum of money. At the time of that first investment, I believe I was making about $19/hour, before taxes (I've since changed my employment situation, though my income is not much better). With the cost of living in Los Angeles and student loans, I was lucky to have had a boyfriend (now husband) to share rent with. So "playing" with this amount of money was scary.
The first stocks I bought were SAM (Boston Beer Co.), NFLX (Netflix) and CSTR (Coinstar). My first lesson in investing was to diversify. Now, I see this as a bit of common sense, especially coming from an architecture background. For example, if the housing sector is hit hard (as it was these past few years) and the only thing you've ever known how to do is build houses...most likely, you're screwed. Why shouldn't the same lesson be true for investing? Whether it's a drought that causes a crop shortage, a fire at a plant, or new competition that comes out of left field, I figure that even though a company or an industry looks strong, you never know what might happen one day to cause a huge loss.
These picks were based upon a few different factors. First, these are companies whose products I use and believe in. And I know tons of other people who use their products too. Further, I think they have staying power, or will be able to stay flexible as times change. Second, it was important to me to think that these were good companies, who maybe gave back to their communities, treated their workers fairly, or cared about the environment. I saw this quality very much in SAM, as they have helped other small businesses with micro-loans. Lastly, I read the latest articles and seeing no "bad" news, jumped in.
Now, I've learned a little bit since this initial investment. I'm still very naive, but those first picks were pure intuition, and I was lucky my intuition was right. I eventually sold my shares of NFLX at $237.60 (bought at $69) and CSTR at $41.50 (bought at $29.65) and still hold SAM at $84 (bought at $49).
Today I hold shares of AAPL, SAM, HANS, LULU, NFLX (bought again today at 116, will explain my reasoning later), T, CPN, TTM, and HTM, in decreasing order of percentage of my holdings. As I actually have "real work" to do, I don't have time right now to go into the details of how I got from that first day to where I am now, including many of the mistakes I've made since then, or the things I've learned along the way...That will have to be another post.
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