| This is it! I'll be investing my own money this week. A few months ago I would have picked a stock simply because I liked the name of the company. If you believe that picking stocks is only the domain of those experts who analyze, study, calculate, compute and otherwise compulsively crunch numbers before selecting their winning stocks…think again.
I read that an investment company held a contest for the most effective ways that stock market experts selected their stock picks.
The winner?
A Wall Street analyst who flattened out a wad of Silly Putty™ and threw it as hard as he could against the stock page of the Wall Street Journal. When he peeled the Silly Putty™ off, the name that stuck to the wad was his pick.
We can all take heart in this story Moms. Picking a stock is definitely not an exact science.
Thankfully I've spent the time to learn the mechanics of picking stocks. But… how do I pick one or two from the thousands listed on the exchanges?
From all my readings and research thus far, time after time, the experts seem to be in agreement on one issue. Buy what you know. If you're a parent, pick kid stuff that you use every day and will continue to use. You know these products well. It might be wise to invest in those companies.
If you are an expert in any field that relates to your employment, hobbies, games, or sports…invest in those companies. You would know this industry better than most, and would know which companies you would be comfortable investing in. If you believe they've been successful in the past, then they should continue to be successful well into the future.
As those companies grow and as the stock price increases over the years, so do your dividends.
For the past year, I have been online with the World Wide Web. As a Web content provider, I am aware of the virtual world. I know the ins and outs because my livelihood is dependent on that information.
I know the Web! While I can't predict where it's going to go in the next 20 years, I trust that it will be with us in some shape or form for quite some time. Therefore, one of my stock picks will be a Web company. I have some thoughts on where the Web is headed and I have found a few companies that share a similar idea. I'm going to trust my intuition and hand them my money. This is about as risky as I'll get, with that portion of my money. Since I'm choosing an electronic company, they will be listed on the NASDAQ.
The rest of my money goes into one of the tried and true companies listed on the Dow. Companies that have been successful for the past 40 years may continue in growth and profitability. I'm trusting that my money will safely grow, right along with the company. This company will be listed on the NYSE.
And that's it. It really is that simple. I feel as if I'm finally doing something for myself that I should have done a long time ago. My knowledge of the volatility of the stock market has also increased my investment bravado. My goal of investing for the long term has allowed me to feel more comfortable with the twists and turns of securities investing.
Stock prices appear to be down from about 3-4 months ago. I'd be foolish to not take advantage of this "dip". I can hopefully purchase more shares with my money than I could have done at the first of the year. That's a good motivator. More bang for my buck.
Just a quick note. I noticed that BUYandHOLD is offering a free book, Eight $teps to $even Figure$ by Charles B. Carlson, for opening a custodial account for a child. I have mentioned this book numerous times and recommend it highly. If you had planned on doing your online investing at BUYandHOLD, now might be a great time to sign up. Don't forget…at BUYandHOLD, you can start with a minimum investment of $20, and it is free to open an account!
Next week I'll discuss what is involved in online investing, including information given, contracts, and what to expect after registering with one of the many online investment firms.
And finally, if push comes to shove and I really cannot make up my mind about which stock to pick, there's always my son's wad of Silly Putty ™.
Thank you for joining me,
Joyce |
