When it comes to investing, the best thing to do is start early. I'm not talking about a savings account or even a CD at your local bank. For those who want to be financially independent, myself among them, it is no longer enough to live out of your checking account. To see appreciable returns we have to look to the stock market. That's where the action is. Believe me, the risk is worth the potential for reward.
Maybe that's easier said than done? I started getting into stocks about a year ago. The markets had just bottomed out, and the sky was falling on Wall Street. That summer I was working in Seattle in an online marketing position and had a good bit of time to spend online. I procrastinated a lot to say the least. One good thing that came out of that job was that it let me keep up with every bit of financial news that hit the web. At the time I had no money in the markets, but I remember feeling that the worse was over for Wall Street. Things had gotten about as bad as they could get and were on their way back up. Yes, plenty of people had lost it all when the bubble burst, but plenty of folks were getting damn rich as the markets came back. Things looked good for anyone with the guts to jump in.
I waited until I got back to school to actually begin investing. I spent a ton of time learning about investing online, in books, and from friends until I felt I kind of knew what I was doing. Still, I jumped in too early and without a coherent strategy. My first buy was Alcoa at about $15 a share. The stock peaked in December of that year at $17 and preceded to crash to $12, leaving me in the dust. Lesson learned. There is always a time to sell; don't miss it (more on this later). Probably the most important thing I've done is to not give up like a lot of young adults do if they get burned. I sold of a portion of Alcoa and tripled the size of my portfolio, buying Apple, Verizon, Coke, and China Information Technology. More to come about all of these in the future, but the point is that I kept at it. Where has that landed me? My holdings were up 24% as of last week. I figured out my strategy, kept my head on, and stayed patient. There is no need to be a day trader, and frankly it's not possible for the typical young investor.
This blog is geared towards anyone who is interested in investing and/or looking to start. The situation for young adults is an interesting one, and I want to help everyone get in charge of their finances. I'm going to be talking about my personal strategy for investing young, the unique difficulties facing new investors, and value-driven, high-growth stock picks.
Keep this one thing in mind: anyone can go and stick some cash in a mutual fund or a CD, but what does that give back? A modest return at best and no knowledge about investing. Picking a brokerage, choosing stocks, and forming a strategy can lead to superior returns and will teach you how to handle your money. That's called independence.
