investing update

Investing: You Gotta Start Somewhere

Advertisement

The Lady in the Black started investing 3 months ago. Considering she’s 47, she’s pretty frickin’ late to the party. However, she’s in the market now and will be for the long haul. If you ever wonder how a newbie investor gets started then this article is for you.

READ THIS FIRST

I must INSIST that no one take any of the information below as financial advice or investment tips. Seriously. I’m SO new to this stuff that I am NOT your source for credible investing information. I am simply documenting my personal lessons learned. I’ll try to point out where I’m getting my information when I can. I am not a financial expert. I don’t even play one on TV. 

The Baseline

I plan to make monthly updates on my progress with investing. Partly to track my own progress and partly to share the lessons I’m learning along the way. Not every update will be a full disclosure of my portfolio but I did here, in order to set a baseline for myself.

The Backstory

First, let me remind my readers that the very first investment I ever made was 3 months ago. (June 14, 2017) I was inspired and encouraged by one of my fellow female personal finance bloggers, Feminist Financier. She’s on a mission to help women build wealth. Interestingly enough, I was a woman who needed to build wealth. I read a particular provocative and educational article titled What the Heck is an ETF?

Around that same time, I became aware of some fintech apps for beginner investors including Acorns and STASH.

I chose STASH, downloaded to my phone and started “fooling around” with investing as a 6 month experiment. (I was fearful but also convinced it was worth a try.) Within the first month, I had money invested across 4 different ETFs!

Around the two-month mark, I was confident enough, and very interested, in exploring investing beyond the capabilities of the STASH app. I opened a TDAmeritrade account on August 10, 2017. I dumped my small vacation savings into the brokerage account and bought my first shares of equity stocks. Again, my plan was to “go in” for $500 and watch it until the end of my 6-month experiment timeline; December 2017.

But my plans went a bit awry and I got a little investment crazy. My “little experiment” grew into active investing.

The Portfolio

As I mentioned, I have investments in two different accounts. In order to simplify this now and in the future, I’ll just keep things organized that way. It also allows me to compare and contrast the two since they have some pretty significant philosophical and operational differences.

STASH

 STASH portfolio

The Deposits

One of the functions of the STASH app, is their “auto stash” recurring automated deposits. Originally, I started with $25/week. Currently, I’m depositing $35/week into the funds below marked with an asterisk. Another thing to consider is that STASH allows for partial share purchases.

Ownership and Returns

STASH makes it easy to diversify your portfolio by offering a variety of ETFs. How you allocate your funds is completely up to you.

  • VWO* – 6.40946 shares, 3.33% total return (This is my largest allocation at 40%.)
  • VGT*  – 0.81656 shares, 3.12% total return
  • MGC – 0.2994 shares, 3.53% total return
  • AOM – 1.07039 shares, 1.58% total return
  • AOR – 1.11891 shares, 1.02% total return
  • SPLV* – 1.43403 shares, 1.18% total return
  • SCHD* – 1.9408 shares, 0.56% total return

The Logic

As far as the logic/rationale for why I purchased these funds, all I can offer is this; I looked for the highest overall return yields. Then, I looked at dividend ratios. Lastly, I considered a “balanced portfolio” although since I don’t really understand that very well, I simply offset my aggressively performing emerging markets fund (VWO) with more conservative funds (AOM and SPLV.) Is that right? Not sure.

The Lesson

The auto-stash function is the key benefit of this app, in my opinion. It pulls money in weekly and purchases the designated funds automatically.

STASH is a “set it and forget it”-type of thing, which is outstanding for long-term investors such as myself.

Their app makes investing easy for beginners and has a fairly robust Learning section and periodic educational emails. Another huge benefit is that STASH charges only $1 fee per month (I think my first month was free.)

The Lady’s Take

STASH was a great intro into investing for me–and I still like it.

Considering most of my current returns exceed the interest rate of my top-earning savings account (1.2%), I’m pretty darn happy. The way I figure it, I spent $2 and have made about $15 to date. That’s $5 per month and learning a TON. And a 2.4% current average return? Groovy.

The one drawback? After the first blush of the initial excitement of beginning to invest subsides, it’s pretty boring. However, I hear from financial experts that means I’m doing it right!

TDAmeritrade

 stock portfolio

Note to reading this graph: Each “slice” is a position. The inner circle is overall gain while the outer circle is daily gain. Green is positive gain, red is negative. 

The Deposits

This is a standard brokerage account with currently no automated deposits.

Initially, I allocated an initial investment of $500 and then budgeted an additional $100 per month to go into this account. However, since my current total investment (including fees) is nearly $950 in 5 weeks, you can see I’ve blown that budget.

Ownership and Overall Gains

ETFs

  • GSIE – 3 shares, overall gain 2.47%
  • DVY  – 1 share, overall gain 1.91%

Equity Stocks

“Blue Chips” (I think these all qualify for that label.)

  • SBUX – 2 shares, 2.43%
  • T – 3 shares, 0.26% (making a comeback)
  • ALL – 1 share, 4.74%
  • TXN – 1 share, 4.75%
  • F – 1 share, 2.99%

“Pharmaceuticals”

  • KALA – 2 shares, -9.32% (shit the bed)
  • ABBV – 1 share, -0.67%

“Energy”

  • KED – 2 shares, 2.74%
  • OPTT – 100 shares, -0.79%

The Logic

As a new investor, there’s not a ton I can say about my logic for each investment in this portfolio. In general, I might read something (a blog, the news, etc) and I’ll put the ticker on my watch list. When I have funds, I review the charts and ratings for each one. As a rule, I look for something with a consistent 5-year upward growth curve and a near-term dip (past month/week.)

I’m experimenting with the pharmaceuticals as I’m a marketing copywriter in that field and actually know a TINY bit about things like market value of certain disease states, phased clinical studies, FDA application process, impact of generic release, etc and the extraordinarily obscene amount of money in the industry in general.

The Lesson

This seems basic and everyone talks about it but the biggest Ah-ha moment lately was about FEES!

Sure, at first $6.95 trade seems like a completely reasonable fee, cheap even considering the overall value of investing. But I’ve made some really stupid mistakes. For example, spending $6.95 to buy 1 share of Ford for $11.38 wasn’t smart. Doh! I’d have to nearly double my money there just to make back my fee. Dumb. Oh well. Lesson learned. From now on, I plan to “save up, buy bulk” when possible to defer the impact of the commission fee.

The other important lesson? Enjoy the ride but DON’T sell. I’ve seen this advice pretty much everywhere and I’m listening. For example, at one point my KALA gain was up to 19%! I was a GENIUS. Then not even a week later it’s nearing -10%. I am an IDIOT.

I’m neither genius nor idiot. The market is going to do what it does.

I’m actively learning about target allocations and plan to “round out” my equity portfolio with some fixed income bonds. However, I need to learn more about the tax consequences and how those little buggers work!

I’m excited to get my first dividend (I’ve already enrolled in the DRIP program) but I don’t know how to figure out when those little treats are scheduled to come my way. What the F is an ex-dividend date anyway?

The Lady’s Take

Once I calmed down a bit from my initial frenzy, I find that investing in stocks is fascinating. When I consider I’ve only been in the space for just over a month and looking at my overall gains, I think I’m doing pretty damn well.

I have a lot to learn, I know. However, I’m anxious to understand at a higher level. I even downloaded a basic investing book to read. (I’ll also be checking out this list of blogger-vetted financial books on Rockstar Finance.)

top 5 lessons about investing

Top 5 Takeaways

#5

There is a BIG difference between trading and investing. Know the difference before you start. I’m investing for the long-haul.

#4

You don’t need a lot of money to get started in investing. You don’t need to understand EVERYTHING to continue investing.

#3

Watch out for fees!

#2

Don’t invest more than you can afford. (This is a tough one when you are swept up in the initial enthusiasm.)

#1

“It has to start somewhere. It has to start sometime. What better place than here, what better time than now?”

What do you think? A decent start to investing? Bonus points if you can source the quote from number 5 above. 

Advertisements
Advertisement

9 comments

    1. Thanks! I really appreciate your comment. I think it’s a far more of an intellectual challenge than simply paying off debt. People know how to pay for stuff, they don’t know how to navigate investing.

    1. Thanks! I’ve heard Acorns is cool…but such little amounts! I realized my post sounded a bit like a STASH commercial but I really do think it’s great for beginner investors. If you try it, let me know what your experience is like!

  1. Hey lady! I was thinking of starting a Stockpile account for the kiddo. Maybe something you’d find interesting? Love hearing your updates and thoughts — keep up the good work!

    1. Thanks! I was considering buying my kid a stock or ETF and have her watch it over the years. I’d “gift” her the earnings when she turned 18. I’ll look into Stockpile, too! Thanks for your nice comment!

    1. Awww. THANK YOU. I really appreciate your comment and would be happy to communicate with any of your mentees if you thought it’d be valuable. I think most people confuse “trading” with “investing.”

Leave a Reply

%d bloggers like this: