The 2008 stock market crash scared the hell out of people. Mostly Millennials who avoid the stock market as a matter of course. This same group
regularly complains about their lot in life. They truly believe there is no way to succeed in a world where all they know of investing and the stock
market comes from anti-capitalist propaganda, and they believe they have to be millionaires to break in. This, in turn, creates a defeatist attitude
toward money and finances in general. "Nothing is real, therefore nothing is worth risking" seems to be the operational guidelines to modern young
It does NOT have to be like that.
The internet has made investing easy with services and apps like Robinhood
which are geared toward beginners. Robinhood does not have minimums so you can start with small amounts of
money and increase slowly as money becomes available to you. I've used this service to great effect on my portfolio.
ACORNS automates the process for you. Investing very small amounts into IRAs, stocks, mutual funds, and other financial instruments. They literally
help you invest your spare change over time to grow a substantial portfolio. Where Robinhood acts more as an individual brokerage ACORNS is more of a
managed fund system similar to traditional mutual fund services, except it's done through an app.
For more in depth knowledge and understanding, I highly recommend Investopedia.com/dictionary
particular page on Investopedia is where you can find many terms clearly defined and how those instruments or terms are used. Knowing the language
will help you understand some of the more intermediate and advanced concepts investors and traders use.
Investors Vs. Traders: What's the difference?
An investor is looking for growth over time. Generally, investors don't concern themselves with day to day market moves and price actions as they are
invested for medium to long-term goals. The taking of profits (selling positions) is a periodic action taken based on market conditions, the investors
tolerance for risk, or simply because they want to or need to.
Traders make money on their trades throughout the trading day. They are constantly doing research for the next days set of trades. They often buy and
sell a single stock within hours or minutes of initial purchase and they take profits on a regular schedule. Day trading is ADVANCED and requires more
than a basic or even intermediate understanding of trading and investment cycles. Day trading requires a decent knowledge of
. For this level of investing I would HIGHLY recommend you spend some
time reading about this subject. Maybe pick up a book or two on the subject.
"I have downloaded the app (whichever one that is) but I don't know what stocks to pick, projectvxn!"
This part seems tricky at first. But it really isn't.
A company stock is price is based on a number of metrics. Some more important than others. If you find a company you like, but they haven't turned a
profit in years and continue to raise capital from investor fundraising alone, then it's probably not a good company to invest in. There are
exceptions to this, however.
Here's an example of what I'm taking about:
Capstone Turbine Corporation (CPST)
Capstone Turbine has been under-performing for years. Their stock has remained stagnant, and although they make excellent technology and are
positioned correctly, their management sucks and they haven't turned a real profit in almost 18 years. They have service contracts and a few new
installation contracts that have kept them afloat and paying the bills. A breakout was expected this year, but their earnings call (and actual
conference call with investors) was dismal and triggered a sell-off. They lost 25% of their stock price within HOURS of their garbage performance
Relying on investment capital to operate isn't necessarily a bad thing. A company does not have to be initially profitable in order to be a good
investment. Here's an example:
Eyenovia, Inc. (EYEN)
Eyenovia is a Phase 3 bio-pharmaceutical company that just had some amazing milestones. It relies solely on investment capital to operate and has
negative earnings reports as a result. They are developing a micro-fluid smart delivery system for the drugs they are developing for the treatment of
various ophthalmic ailment. Their phase 3 studies on some of their more promising drugs have all been completed using their microdosing technology and
their results are promising. This is driving their stock price upward and have made them an awesome addition to a new investors portfolio.
Capstone shares are around 78 cents per right now. Eyenovia started last week at $2.70 and now sits at $6.30.
Looking at the histories and fundamental performance of individual companies is extremely important to investing. This is what is referred to as
"fundamentals" of investing. Generally, if a company has good fundamentals then it is typically a good investment.
"But why do this at all"?
Because you will work the rest of your life for your 25-50k a year job and never be able to leave it because you will have nothing saved for
retirement. Investments generally outperform savings accounts by SIGNIFICANT strides. My savings account with 10k in it earns a paltry .25% interest.
luckily I don't care about the interest and I only use that account to store cash. Sometimes I will have a
Certificate of Deposit
if I need to lock away cash for a period of time.
These are NOT growth investments and they certainly aren't profitable. Interest rates this low will not help you.
My portfolio of an initial $2000 has by far outperformed my savings account in the same amount of time. When the stock market is hemorrhaging and
looking for a bottom, I am there looking for the good deals. The strong performers who were in a good position to weather storms others folded in. And
I'm looking to get them cheap because, as a medium to long-term investor, I'm looking toward the next horizon.
I am not a financial advisor and I'm NOT giving you investment advice. What I AM doing is advising that YOU DO invest and not work until the day you
"If you do not find a way to make money while you sleep you will work until you are dead."
Words to live by. I can't stand the dude, but he is 100% correct here. Investment is the biggest difference between the "haves" and "have-nots". Where
do you want to be in this?
edit on 10 2 19 by projectvxn because: (no reason given)