A few weeks ago my wife and I looked at the stock market crumbling and thought, “hmm… looks like a good time to invest.”
Right now most of our savings are split between a 1 year CD with a 4.25% APR, and a high interest online savings account. But the interest on those accounts barely outpaces inflation, so we’ve known for a while that we might want to look at more aggressive investments. We’ve just been too lazy to figure out how this whole investing thing works. But when stocks started hitting all-time lows, and then dropping even further, I figured I should take a crash course in the stock market and pick up a few stocks while they’re cheap, in the hopes that one day the market will recover at least a little bit.
With that in mind, I took a fairly small amount of money and signed up for an account with Scottrade, an online investing firm. And yesterday I bought my first stocks. After looking around for a bit, I decided to pick up a few shares of Marvel Enertainment (MVL), Bed Bath & Beyond (BBBY), and Whole Foods (WFMI). My strategy is to:
- Avoid buying shares of companies that I may cover as a journalist and blogger, which pretty much puts tech stocks like Google and Apple out of the picture.
- Invest in companies that don’t make me feel dirty.
- Find companies that I think have a solid business and will weather the economic downturn.
At the end of my first day, I was up $11, which made me feel pretty good until I realized that ther markets rallied yesterday and while my stocks went up, they didn’t go up nearly as much as most of the major indices. Which is to say, it’s a good thing I decided that the right time to start buying was when everything is really cheap, because I’ve got some learning/diversifying to do.
Anyway, yesterday was a bit of a roller coaster. For example, upon seeing that Whole Foods was trading near its 52 week low, I figured it was safe to pick up some shares for around $8.50. Over the course of the day, the stock dropped by nearly a dollar. Instead of cashing out and taking a loss, I figured I should buy some more stock, so that my average purchase price for the day was closer to $8.00. I was rather proud of that move until I read that the company’s merger with Wild Oats hit a road bump yesterday which was probably accounting for the decline in share prices. Maybe I’ll hang onto this stock for a while and hope for the best, or maybe I’ll sell some shares on Monday and find another company to invest in instead. Overall I know the best strategy is to find a few good stocks and hold onto them for the long haul, but right now I’m just learning how it works.
Scottrade has proven to be really easy to use. The company’s website gives beginners a ton of information, and there are more advanced tools for more experienced investors. And the commission for each trade is just $7, which isn’t that much more than you wind up paying in surcharge fees for transactions at ATMs these days.
If you’re interested in trying out Scottrade, use my referral code when you signup and I’ll get a few free trades: DOYM1091.
Brad – Welcome to Scottrade! I am glad to hear that you have enjoyed your experience so far. If you haven’t done so already, check out the Scottrade Online Community (http://community.scottrade.com). The Community is another resource where you can meet and learn from other Scottrade customers and Scottrade representatives.
Amber – Scottrade Public Relations