My goal for September was to learn about the stock market and purchase stock. Outside of changing my 401k portfolio and selecting stocks within that, I haven’t purchased stocks with the money we set aside for investing….yet. The next meeting with our financial advisor to put the cherry on top of this goal is towards the end of October. Until then, here are the 10 things I’ve learned this month.
People Don’t Like Reading About Stocks – You guys, the number of people reading my blog posts this month tanked. You guys like recipes and jackpot winnings and selfies from when I wake up early….I get it, I get it. No one likes a blog with fancy financial terminology.
Perception is Reality – A rumor or people’s perception of something (right or wrong) can sway the stock market. A rumor, whether spread by the media or general public, can make people get nervous or aggressive in their stock market purchases. People may start selling stock if they hear a rumor that something may go down the tubes even when there’s no solid data or evidence to support it. I think this applies to basically everything in life, but found it interesting to see how it plays out in the stock market.
Get a Financial Advisor – Even if you’re not going to invest…get a financial advisor. Find someone you think is good with their money or makes wise money-related decisions and ask for the name of their financial advisor. They will ask you about every penny you’ve ever spent or plan to spend and it’s super annoying and requires a lot of meetings and paperwork and sloppy signatures, but it will pay off in the long run. The good ones are focused on helping you achieve your long term financial goals.
Download the App – Halfway through the month I realized the company that my 401k is through has an app. The benefit of viewing things on a mobile device is how simple it is to read/make changes. I couldn’t figure out how to buy/sell stock on their actual website but ended up making all my trades on the app while in the airport during a layover on vacation. Plus, you are just a few taps away from knowing what you have saved for retirement at all times (which could be good or scary, I guess).
Don’t Look Everyday – They say not to watch your stocks everyday. Its like looking at the mortgage rates after you’ve locked in. Some days it will be up and some days it will be down. It’s best not to peek everyday (even though I didn’t follow this rule) because you start stressing when it’s down multiple days in a row.
Investing Is a Long Term Strategy – Investing is not like winning a jackpot on a slot machine…though I do compare it to gambling. Investing is a long term strategy (well, I like to argue that slot machines are too, but that’s another post). You have to be patient with it and plan to be in it for the long haul.
Do Your Homework – Going into this month, I just assumed that some of the popular technology companies would be the best stocks to purchase. They may be….but I was surprised to find some of them priced so low (which could be good depending upon how you look at it). It takes a few google searches to find the highest and lowest priced stocks so do your homework, don’t just buy Apple because you think it’s cool.
Make Your Money Work For You – The first post I did on this topic was called “lazy money.” If you’ve saved a fair amount of money and it’s just “lazy money,” as in it’s not working for you by just gaining 10 cents in interest per month, then consider investing. Don’t invest all your money….you have to have some sort of emergency fund…but consider investing some.
Set Up a Brokerage Account – If you want to actively manage your 401k, you have to move your money to a brokerage account in order to do this. It seems straight forward, and then confusing, and then straight forward. It will take a day or two to move your money over, but you can select your investments from there. Your automatic deposit into your 401k will continue to go into your original company plan, but it’s advised (from the people I talked to) to continue moving money over to your brokerage account and selecting your investments every quarter or so.
Trades Aren’t Free – It depends on what you’re buying, but it typically costs $4.95 to $7.95 when you’re purchasing stock or making a trade.
I did it!…kinda….still a work in progress.