Time to start buying stocks again! The J-man's excited...
It's been a long time since I've owned individual stocks (6 years), and I'm feelin' lucky! The market's down, our savings are up, and I'm ready to give it the ol' college try again. Plus, I'm a lot better off financially and emotionally than I was the last time I gave it a shot.6 years ago I was just rollin' the dice and doing my best to outgame the system. Sometimes I won (bought XMSR @ $20 one day, and then sold it months later @ $29), while other times I crashed and burned (bought Sirius @ $2.25, then sold it weeks later for $1, only to watch it go right back up). The reality of it all was that I just didn't have a game plan. All I knew was that I a) wanted to be a baller and "trade" stocks, and b) wanted to make some fast money with no effort ;)
Needless to say I was a financial loon, and certainly no baller. Although I'm sure E*Trade loved me! They tend to like it when you drop $10 a trade every other day, haha...even worse, I was losing a sizeable chunk of money right from the get-go! If you're only playing with $100 or $200 of stock to begin with, you're automatically giving away 5-10% every time you hit that buy or sell button. I was seriously smoking something, and it wasn't the good stuff either! (not that i know what the "good stuff" is or anything)
But if you're gonna play the game, you've got to have a plan. And this time I have one :) You ready for it? It's gonna blow your mind I just know it! Okay, here we go....drum roll please....bah-buh-bah-bah, alright, here it is! My plan is....I'm going to invest it for the long haul. Sexy, huh?! haha....well, it may not SEEM all hot & juicy, but it's a lot better a plan. You see, I'm not in the business of making quick cash anymore. Nope, I'm ready to kick back, be patient, and watch it grow over time while I earn my wrinkles.
I've also decided to give myself an allowance for this, and it's all money I can live without. That way, if my repeat performance sucks again I'm not gonna lose any sleep over it. No siree, it'll be just like taking a trip to Vegas, except with better odds. In Vegas, I bring $200 bucks to "play" the tables, and when I lose (because I always do) I'm cut off - no hitting up that ATM again. In this new venture, I bring that same $200 and when it's spent it's spent - no going back and xfering in more money to "break even". This way I get to have a little fun, but at the same time I don't go overboard.
Plus, I'm not counting on becoming a millionaire off it or anything. I just want a little more investing experience while I have the means to do so - and while the market is still so freakin' low... and I'm not gonna sell it every time it takes a dip either. This time around it's all about buying it low and holding onto it baby! I doubt I'll pick the right stocks at the right times, but you know what? That's okay. It's just time daddy gets a new toy to play with ;) I love my mutual & money market funds, but every now and then ya gotta spice things up a bit. And for me, that time is now.
Labels: investing, retirement, stock market
posted by J. Money at
7:08 AM
23 Comments:
You are a brave man. I think my risk tolerance is just low right now because man, stocks scare me. I know that I should get into it - like you said, with money I can afford to lose - because worst case scenario, I lose it all but I learn a lot in the process. Can't wait to see how it goes for you!
sounds like a plan. i agree with the idea of investing in stocks with money you can afford to do without, especially in this current market.
so is the allowance $200 a month? will you continue to use e-trade? i'm not sure what their fees are now but $10 a trade seems a little high.
I've had dreams of making a fortune overnight on stocks, but I'm too chicken! I only own funds right now. I'm thinking of getting into DRIPs this year, do you know about those? Might be a good idea for a buy and hold investor like you :) You buy stock directly from the company, usually fee free with periodic investment. Look it up.
Whatever you do, stay away from GM/Chrysler stock... hehehe
Seriously though, sounds like fun! I know I get a thrill everything the ole company stock or mutual funds go up :)
Be sure to checkout Sharebuilder. It allows you to easily do dollar cost averaging on any time frame (bi-weekly, monthly, etc). If you pick the standard plan for $12 per month, it allows you 6 of these trades. I've set my account to buy $100 worth of 6 different stocks / ETFs each month. As a bonus, it can automatically reinvest dividends for you and allows you to buy fractional shares (so you can invest by dollar amount, not by share amount).
I used Sharebuilder a few years ago and liked it very much. When I do get back into buying stocks, I will use it again.
Funny you mention Sirius... I bought some of those as well. I think I made like $30 bucks when I sold them... although I am just happy I sold when I did cause a couple years later the stocks went down to like 15 cents. Ouch!
@Megan - haha, it sure isn't for anyone - esp these days! I just figure it can't get *much* lower ya know? might as well give it a shot when the market's down than when it's soaring like a mad man. I'm hoping it increases my odds :) I'll be sure to keep everyone updated w/ my progress...
@Ms. MoneyChat - Nah, I think I'll up the ante abit and go for somewhere around $1k a year..this way I can invest in a cple different companies, and then diversify a bit more...And yup, I know what company I'll be using for it! Actually got a post in the works about it, so stay tuned. (hint: it's one of my favorite companies in the entire world, and I once proposed to it)
@Miss M - DRIPs huh? Nah, never tried it out myself, but i'm pretty sure my dad does this with his GE stock, I'll have to ask him more about it. Thx for the idea! Perhaps I'll do a little post on 'em later?
@PirateKitty - Crap, i just bought some!! haha, nah...i'm crazy, but not *that* crazy. I seriously hope they make it out okay and their stock gets back up there, but def. not willing to risk my money on it.
@Adam - NPF - oh wow, that's pretty chill. I've always heard great things about them, but never realized you could set it up like that - freakin' sweet!
@Pauper princess - Haha, good job!!!! You know, as bad as it sounds Sirius XM is now on my list again to research again :) Not sure if I'll pull the trigger, but I know they just got saved from going under and I can't imagine the stock going much lower...anything's possible though.
So are you sticking with E*Trade?
Have you done more research this time? I have no individual stocks, really don't know anything about investing like that, strategies or anything else that makes sense. Also, I don't have the excess money which from what I've been told is a good thing to have. Do you have a more specific plan like diversifying or investing for the long run?
J,
2 Comments
1) Ditch E-Trade I use TradeKing and pay literally half (5 bucks a trade)...
2) Want to get into some fun but convservative stuff? Check out covered calls! I have a ball with them, but they won't make you bank
J, One word: Plastics. Okay, so I have no ideas other than to quote a movie 30+ years old. :-D
@Revanche - Nope, no E*Trade this route.
@Craig - Hmm...that's a good question. I wouldn't say that I have more research under my belt per se, but more like I'll be trying to pick some big & sturdy stocks out there - instead of the random "cool" ones I pray to make it big :) although i can't promise i won't drop a $100 every now and then on 'em! and the only thing i'll be really diversifying is the fact that i'll now own stocks on top of all the other fund and such that I own - I'm not gonna limit the kinds of stocks I buy on any real terms as it's mainly for fun and to learn a bit. You are right though, if you're going to throw some money at individual stock, it's good to not be counting on it for anything (ie. to pay your bills)
@My Journey - Yeah, def. not using E*Trade again, but to be honest the amount of $ per trade isn't all that important to me as I'll only be placing a few a year ;) Now if i get addicted to it, then I'll be sure to check around! And covered calls? Noooo idea what that means - but feel free to teach me! Perhaps you should do a post on it and holler back?
@Shtinkykat - Haha....well then you won't feel bad when i say i have no idea what movie that's from! but it does sound good.
Hey J.. nice article.. I really liked this phrase "doing my best to outgame the system" .. that is so true about these stock markets. We are indeed always trying to outgame the system, without really having a game plan.
Investing in individual stocks is great... I manage my own portfolio of about 40 individual stocks right now, I've been doing it for just about 10 years! Definitely a buy-and-hold investor, me. Feel free to ask me about DRIPs, I've got lots of 'em!
movie = The Graduate, one of the best ever. Please tell me you've seen it!!
http://www.youtube.com/watch?v=PSxihhBzCjk
p.s. lots of fun and luck with the stock game! I've wanted to do that for a while but I need to get some savings done first. ;)
@Ishan@ Save Few Bucks - yessir, and it's not good...nor easy for that matter.
@MoneyEnergy - Word? that is awesome bro, good job! hopefully I'll be better/smarter off in 10 years too ;)
@Sense - There's a good future in plastics! haha...thanks for the link, it's been a looooooong time since i've seen that. and i don't even know if i've ever watched it in its entirety? guess i'll have to change that :)
Shtinky was referring to the Graduate, which I knew even though I have not seen it (actually I think I have but I forgot the details) only because I am in the middle of reading, "Bobos in Paradise." The book is nine years old and I keep that in mind constantly, but it's somewhat interesting reading so far. Helps me to make sense of a lot of the insanity I see out there. (and helped me to formulate: What's worse than a Bobo? A would-be Bobo nine years too late.)
Shtinkykat, the new stage versions of the Graduate have upgraded to 'Semiconductors'. lol
Seriously, I just told Meg@CountingMyPennies that we should start a DCPFBlogger investment club. R u in?
hell yeah i'd be in! as always though, it's just a matter of who will be running it ;)
Hey J. Money. . .
I love your site sir. I visit at least once a week. Hey, just wanted to maybe help a brotha out. . .I used to trade individual stocks and had my share of thrills when I would make money and frutrations when I would lose money. When it comes to investing, the truth is that it is just plain tough to beat index funds. Why? It's just too difficult to beat, or even match the performance of market over the long term. Even the "pros", those who claim to trade professionally or invest long term professionally can't do it (not CONSITENTLY anyway). And see. . .that's the key. . .especially if your purpose is for the long term. My advice is to take what you do know - The market as a whole is down tremendously! You are right that this is the time to invest, but do yourself a favor and take advantage of this by investing in a low cost index fund. In the long term the market always wins! I'm a Vanguard man myself (great selection of funds and low expense ratios). Check out their target-date retirement funds (Look at VTTHX or VFIFX). You don't need to use them for retirement purposes but they offer a beautifully crafted low cost portfolio. The only downside is that the minimum initial investment with them is $3000. Sorry if I wrote too much I just thought I'd share my view on picking individual stocks. Cuz hey. . .we all gotta look out for one another! Peace out and keep up the good work. And if you still decide to pick individual stocks anyway, good luck bro!
Wishing you loads of luck, J.
And yes, Shtinkykat... "Plastics". Love that movie!
Bejamin: Mrs. Robinson, you're trying to seduce me.
Mrs. Robinson: Would you like me to seduce you? Is that what you're trying to tell me.
LOL, wonderful scene.
And sorry J for getting off track here. This turned out to be more of the film enthusiast in me's comment than the money lover's :)
@bmelikia - hey, thanks for the great info! And for always popping in - really appreciate that :) i'll agree w/ you on the index funds too for sure, esp Vanguard as they're ALWAYS getting great reviews! For the purposes stated here though (picking for fun and just dabbling in the market a bit) i'll be sticking with the individual stocks. I actually already have some index funds & target date ones which account for 98% of my entire retirement portfolio, but it's time for daddy to get some one on one action! haha...thx again for the detailed comment, they are always welcome.
@DH - Hey, whatever floats your boat over there :) it's def. a great movie.
The only principle of investing that I can name is "Buy Low, Sell High." I think this fits! :) Good luck!
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