Smoke ‘Em If You’ve Got ‘Em

Ah!  I like to blog every 3-4 days, but as this blog has inspired momentum on so many things I find myself juggling between work, workouts, this goal, blogging about this goal, writing a book for my November goal, and researching how to publish a book for my November NYC trip.  So I had to skip the mid-week blog and give ya 6 days of stock market knowledge all in one bite this time…

Sept 6:  Instead of watching YouTube videos, I actually just googled “Stock Market 101” and read some basic info (http://www.quickenloans.com/blog/stock-market-101-understanding-basics)

I blogged last time a little about Dow Jones and S&P 500, but today I read more about each one and threw in the Nasdaq Composite for good measure.

Dow Jones Industrial Average “is an index that measures the stock trading of 30 different blue-collar companies, ranging from American Express to Walt Disney” and noted as one of the most watched stock index in the United States.  It has been around since 1896!  They didn’t even have computers then, how would one buy and sell?

The Nasdaq Composite can be made up of companies outside of the United States and includes over 3,000 components primarily coming from technology and growth companies.

S&P 500 has been around since 1923 and the 500 simply represents the number of companies that have their stock included in this index.

I’m still wondering if you can invest in Dow Jones, Nasdaq, and S&P 500 as a whole or if you have to invest in each specific company within those?  I would assume you could invest at that higher level, otherwise, why would I care to see a rolled up view of 500 companies if I only invested in a few unless I was really just looking at overall market trends?  I want to find this answer out.

Sept 7:  I looked up my question from yesterday.  It looks like you can purchase S&P Index Funds.  The website I looked at asked and answered the same question I was pondering which was….is everyone just investing in the same thing and receiving the same return?  The website said that the main difference has to do with the fee advisors will charge to make the trades which can affect the return you receive.  This still leaves me with so many questions, but now I know you can buy “index funds.”

Sept 8:  I decided to log into my 401k.  Things are green with plus signs next to it.  Can I retire yet?  And….I own index funds.  Go figure.  I’m not going to give you the breakdown of my entire 401k portfolio, but as mentioned in my last blog post, we have been working with a financial advisor who told me specifically what to invest in.  I will say, I did invest in VOO (which I just thought of voo doo when I first knew those were the letters) but it’s actually the Vanguard Index Fund and if you google it, it’s code for S&P 500.  I am also invested in an international index fund which is not nearly as exciting given that it’s highlighted in red with a minus sign next to it today.

Sept 9:  I received some interesting investing advice today from a friend and former coworker who has recently been following my blog.  Hopefully he doesn’t mind me revealing his secret investing strategy (we have a lot of blog readers, but not enough to impact market prices so I think I’m safe), but he tells me that stock in the marijuana industry is currently low and there’s a potential high reward should it become legal in all 50 states.  Genius!  At least I thought so.  I mean, nevermind your personal values about how you feel about the legalization of marijuana (sidenote – I watched an amazing documentary when I was in a college sociology class on legalizing medicinal marijuana which totally changed my opinion on the drug for cancer patients, but I’m straying into a drug blog here and need to back away slowly), the idea itself is genius – simply because he’s scouting out things that are small now with the potential for real growth which seems obvious but I was/am not advanced enough in my thinking as it pertains to investing to have really thought about it that way yet.  I thought buying stocks really just seemed like another form of gambling, but I’m about 2 weeks and a couple thousand away from being a full on drug dealer at this rate.

I later called another friend from work (mutual friend to the marijuana investing friend) and tell him about the idea of investing in such a thing and how it actually seemed like a good idea in theory (my morals would never let me do it).  This led into a good conversation (once we got past the mini brainstorming on blog titles pertaining to pot…..I was tapping dancing between “Dope Nation” and “When Stocks are High” but dropped both last minute).  Anyway, he did tell me how rumors can sway what is high (no pun intended) and what is low in the stock market.  For example, if there’s rumor that a certain product may not longer be needed in the future because of the takeover of something else – then the prices will drop on the product that is rumored to no longer be needed.  I really wanted to come up with a good example, but I can’t, so the point being….the market can fluctuate simply based on rumor and no solid data.

Sept 10:  I heard back from the financial advisor’s assistant that they were waiting on some info for other items we discussed (life insurance) so we will set our next appointment once they have what they need so we can cover everything at once.  I learned what it means to be a mutual company yesterday so I took the opportunity today to share that info with someone I worked with – super embarrassing considering we both work for a mutual company, but I stand by the fact that most there couldn’t really articulate what it means to be a mutual other than the tag line we often hear which is “we do not report to Wall St.”  Anyway, if you’re not an expert on what a mutual company is – it’s similar to a public company but it’s an insurance company owned by policy holders and the Board of Directors acts as the voice of the policy holders (I think).  So technically, if the company had an amazing year, policy holders could receive a dividend similar to that of a public company, but there’s various reasons why that doesn’t or is less likely to happen – all of which will bore you.

Sept 11:  I finally set up an online account that was needed to transfer money into before purchasing stocks.  This is an account through the company our financial advisor works for and one where they had set up our profiles and posted some documents out there already based on previous meetings we’ve had with them.  Chris and I previously agreed on how much we’d put into the account to start our investment strategy.  There’s a $0 account balance as of now.  But there’s an account and a lot of emails confirming that there’s an account.  I think I’m a few clicks and dollars away from owning a share of a company or two or twenty.

So the next couple weeks will continue to be focused on learning about the stock market in general, and I will be moving money into the account I just set up and investing in the stock market outside of just my 401k.

Which companies will I invest in…..no one knows…..