Earlier in the year I decided to try out a new investing strategy and throw a pile of money only into companies that I LOVE and use all the time. Places like Amazon, Target, TJ Maxx, etc. I figured if I spent my money there all the time and am always getting addicted, others are probably doing the same! And then it would feel good supporting these places too – kinda like an all around happy energy flow or something ;)
So when it came to invest $22,000 into my SEP IRA 8 months ago, I decided to pour half of it into all those companies I love and frequent all the time, and the other half into companies that were either recommended to me by close friends, or those I took a gamble on just to see what would happen. A fun little experiment to try out, but also totally separate from my big nest eggs that are invested a LOT more conservatively and outside of my personal reach. That way I don’t go overboard and kill off our family’s fortunes or something crazy like that ;)
(I should also make a note here that I do *not* endorse playing around with your money so much either, especially those who can’t sustain major loses. So don’t try this at home kids! Haha…)
Anyways, I thought it would be cool to see how our progress was going so far, and to compare MY strategy with those of someone else’s (those that were recommended to me) – even though it’s all my money that we were playing with here. And also MY risks and rewards! I ended up keeping most of them invested over the months, but there were a few that I have since sold off and thus skewed the overall numbers. You’ll see those noted down below though.
The companies I invested in that I love (none sold off):
- TJ Maxx (TJX) — I put in $2,000. Now worth $2,182.37.
- Target (TGT) — I put in $2,000. Now worth $2,161.83.
- Starbucks (SBUX) — I put in $2,000. Now worth $1,987.10.
- Panera Bread (PNRA) — I put in $2,000. Now worth $2,040.89.
- Amazon.com (AMZN) — I put in $2,000. Now worth $2,524.92.
The companies that were recommended to me, or I tried to hand-pick myself:
- Bankrate, Inc. (RATE) — I put in $1,000. Now worth $441.76*. (I sold at $798.35)
- QuinStreet, Inc. (QNST) — I put in $500. N0w worth $336.02*. (I sold at $491.70)
- SandRidge Permian Trust Common (PER) — I put in $4,500. Now worth $3,690.54*. (I sold at $3,960.54)
- First Potomac Realty Trust Comm (FPO) — I put in $6,000. Now worth $5,539.18. (Still have, but will sell soon…)
Can you tell which group was more successful? Haha.. Not that 8 months is nearly enough to really compare funds like that though, but still. Another cool thing about investing in companies you use is that every time you patron them it’s like putting pennies back into your pockets! Haha… A much cooler and fun mentality to have while investing than others. At least for me.
(Another interesting strategy? Investing in companies you HATE, but who you’re forced to pay anyways like your cable providers or energy companies/etc ;) Not as fun giving them your money than, say, the places you shop at, but as one commenter pointed out the last time we blogged about this, you at least KNOW those places are gonna bring home reliable streams of income! You’re giving money to all those places and you don’t even like them! Haha..)
Anyways, a total of $22,000 invested 8 months ago, which would have now totaled $20.904.61 had it not been for selling some of them off… When you factor in all that (I just put the money back into those same stocks I love above) – our grand *current* total comes out to about $21,686.88. $700 more than if I had left them all alone, but still $300+ lower than my initial investments from Day 1… Not the greatest outcome you could hope for, but it is what it is.
We’ll have to come back in another 8 months or so and see how things are looking then :) And in the meantime, I’m staying away from all those “recommendations” from people! If my new strategy here continues to be somewhat successful, I’ll run with it until I get another cockamaimy idea to try out, haha… As long as I keep containing myself within a small % of my overall portfolio, I’m more than happy to try new things until I come across a winning plan. Just consider me everyone’s guinea pig! ;)
How are your strategies coming along? Anyone knocking it out of the park? Hope so!
PS: All numbers above are accurate as of 11/8/12, when I first pulled them for this article… Which also happens to be the time right after Obama won and crashed the entire market! D’oh.
PPS: In case you missed it, I *don’t* recommend this stock picking strategy to everyone. Make sure to do your own research and follow the paths that work right for YOU. I’m a bit more hardcore than most people, so don’t take any of this as advice! Cool?
(Photo by GabrielaP93)