Last week I talked with a relative who used a broker to handle her investments for many, many years. When her son asked me about the process of opening an online portfolio and handling his own investments, his mother quaked in her boots. "I would be so frightened to use an online brokerage," she stated. "I trust my broker, and I've used him for a long time. After all, you can't teach an old dog new tricks!"

I had to chuckle, because this relative is my age. I reminded her about this fact as I stated that I didn't like to be compared to an "old dog." In my opinion, the only thing standing between old dogs and new tricks is fear. So, in exchange for her unintended insult, I regaled her with my story below (although most of you haven't insulted me, you'll hear this story anyway)...

I remember the first time I went into business for myself. My field was graphic design, and at one point I decided to add printing services to my business for additional income. I knew I could make more profit if I ordered my own paper for printing than if I relied on the printer to supply the paper, so I investigated a few paper supply companies. I finally made a choice to purchase from a supplier close to my home office, in the hopes that I would save money on gas.

Once that decision was made, I jumped in the car and drove to the paper warehouse. I drove up and down the street in front of the paper supplier ten times before I turned into the driveway, and by that time I was sweating bullets (and I wasted a lot of gas). Why? I was scared to death! I never ordered paper supplies, and no one taught me how to go about the process. When I finally walked through the door, I realized I had nothing to fear. The suppliers were eager to teach me about their paper products, and they begged me to come back as they threw a free ream of paper into my arms.

This little experience taught me one important lesson: My fear is so powerful that it can override my common sense. Think about it - those paper suppliers wanted to make money, too. Why would they bite my head off or treat me like the fool I believed I was at the time? My fear of trying a new behavior caused me to forget that I was exactly what those paper suppliers wanted - a new buyer! I actually made a nice profit when I purchased my own paper, and I learned a lot about the paper business in the process.

This same fear can cause us to overlook our potential as investors. Companies want people to purchase their equities, because it helps their company grow. While I encourage you to conduct research into your portfolio choices, we can turn this research into a delay tactic. We end up driving up and down past that equity until we give up, run out of gas, or finally decide to become a real online investor.

One of the fundamental rules for fundamental investors is to buy what we know in a business we understand. At this point in my life, I know enough about the paper business to decide whether I want to invest in paper. You might know everything anyone would want to know about erasers. Or, you might understand dishwashing detergent or peanuts. The wonderful thing about your knowledge is that you and you only know whether that business is worth your investment dollars.

Of course, you may decide that you want to invest in something you know very little about. What do you do then? Well, one thing I learned from the paper business is that you can pull into the driveway and you can inspect the goods. You can even learn from the employees. However, you don't need to buy what you see. You can shop around and learn even more about that product or service before you invest your money.

Notice I didn't use the word "expert" in my explanations above. I used the word "understanding." It might take a lifetime to become an expert, but it takes much less time to understand a product or a service. This understanding also works for your role as an online investor. Let me explain...

If you never invested before, or if you used the neighborhood stock brokerage firm, you might be a little fearful about becoming and individual online investor. Ok - you might be a LOT fearful. I understand. My graphic design service was adequate, but I wanted to make more money, so I began to offer a printing service. Likewise, we might have bonds, savings accounts, and money market funds. But if we add equities into the mix, we might make more money.

Additionally, I could just drop my orders off at the printer to make my life easier. However, I wanted more profit. So, I had to overcome my fears and add a little work to my schedule. Again, likewise...we'll make more profit if we do the work ourselves. BUYandHOLD makes this effort easy for us, because we don't have to jump into our cars to add equities to our portfolios. Additionally, we save a great deal of money if we don't have to pay exhorbitant broker fees.

Yes, it's a bit more work when we control our own portfolio; however, once you try your hand at this effort you may never go back to the "old way" of doing things. Why? Because you develop an understanding about online trading. If you open an account at BUYandHOLD and purchase just one equity, you will know much more about online trading than you knew this morning. It's easier than going back to school. Trust me.

Lastly - how do you know you've done enough research to invest in your chosen equity? Look at the date on that annual report you ordered. If it's a year old or older, then you've driven past that equity one too many times. If you use excuses like, "It's an election year, and I don't purchase stocks in such a volatile environment," then you're wasting your gas. If you opened an account at BUYandHOLD several months ago but you can't bring yourself to deposit money to purchase stocks, you're losing valuable time and your fear is now your profit's enemy.

Remember - at BUYandHOLD you don't have to be a millionaire or a dog to become a portfolio owner. Just remember - the only thing between you and some new tricks is fear.

Until Next Week,
Linda Goin