Okay, so you might know that I recently invested in the stock market using the Public app. I’ve learned a lot in the past almost two months. I learned that I learn best from mistakes. I learned I’m really bad at taking my own good advice, and I don’t like losing money.
My brothers have always teased me about how I am with money. When I was a kid, I hoarded my money, in fact, I skipped lunch at school and kept the money my parents gave me. By the end of high school I had about $1200 in lunch money saved. Somehow, the wheels fell off when I became an adult, and I didn’t prepare well at all for my old age.
I’m sharing all of this because I’m a recently divorced woman with very little retirement savings. I’m not alone. Many Americans are in the same boat. I thought I was going to be able to share in my husband’s (of 26 years) retirement, until he decided he wanted to fool around with half the women in town. So, I was totally unprepared financially.
I’ll just say flat out that the stock market is a bad place to put money you need right now. It’s risky. There are better ways to gain wealth, like getting a better paying job, starting your own business, and not spending foolishly. What I have invested in is just a small part of what I’m doing. Mostly, I just find it interesting. I tend to go all out when I find something that grabs my attention. I want to learn everything about it, so that’s what I’ve been doing.
What I’ve learned is that investing in the stock market is not gambling. You’re picking companies that you want to own a little piece of. You have to have good sense. You have to do your homework. You have to be able to take the ups and the downs.
So far, I still haven’t lost any of my initial investments. I’ve lost my gains, but not the money I’ve put in. Why did I lose my gains? Because I sold the stock in a panic when it dropped for a few days. A few days later they returned to the price I paid and even went higher. I could have made much more, if I didn’t chicken out.
Also, I believe Warren Buffet said that if you wouldn’t own a stock for 10 years, then don’t own it for 10 minutes. I had some stock that was extremely volatile. There were days of big gains, but usually followed by days of big losses. So, I found more stable stock.
You’re basically marrying your stock. You’re in it for the long haul, for better or worse, for richer or for poorer. The good news is that stocks owned over many years is almost guaranteed to do you good (unlike some husbands). You’ll be rewarded, as long as you pick great companies and great stock.
I thought I’d just share the reasoning behind why I picked the stock I have, so it can give you an idea of things to look for. There are many, many more great companies out there to invest in. This isn’t the model portfolio to base yours own. I’m sure. You could pick a better mix than me, but it’s just an illustration of things to think about it.
As of right now, these are stocks I’m invested in:
- Vanguard S&P 500 ETF (VOO)
- NVIDIA (NVDA)
- Apple (AAPL)
- Pepsi (PEP)
- PowerShares QQQ (QQQ)
And I have a couple of penny stocks, though these might change if I find better ones with more potential:
Asensus Surgical (ASXC)
I’ll go over why I chose each one.
Vangaurd S&P 500 (VOO) and PowerShares QQQ (QQQ)- I chose these two ETFs because of their great track record and their ability to diversify risks. Instead of trying to pick the right mix of stocks yourself, ETFs do the picking for you. Your 401k is probably invested in an ETF of some sort. Depending upon your age, it’ll be invested in a more aggressive, moderate, or conservative ETF. When you’re younger, you can take bigger risks. When you’re close to retirement, you can’t.
Over the past 5 years, VOO has risen in value by 122.9%. QQQ has risen 237.4%. So, you might ask, why not just put it all into QQQ? Well, QQQ is invested in only NASDAQ listed stocks, which are your big tech stocks, and tech stocks have been on fire over the past 5 years. VOO also includes tech stock, but also more traditional stocks like Kraft, Walgreens, DuPont, Citizens Financial, American Airlines, Under Armor, etc,. Basically, VOO is much more diversified, so if tech stocks tank, the other stocks from different sectors might do better.
The biggest chunk of my money is with these ETFs. You could just pick one of these and that would be enough, but I like following different companies.
NVIDA (NVIDA) makes computer chips, and they are in very high demand, and will be for many years to come as technology advances. Their products aren’t just used in computers but also gaming systems, and in the cars of the future, which will be much more high-tech.
Apple (AAPL) If I have to tell you why I’ve invested in Apple, then you probably shouldn’t get into investing. The company is worth $2.5 trillion dollars and continues to grow. They also continue to be innovative. They’re not resting on their laurels. Big companies can fail, (remember Sears) if they don’t keep ahead of the times. I trust Apple to remain a tech leader. They also have VERY good business sense.
Pepsi (PEP), Costco (COST), and Lowe’s (LOW). One word. Dividends. Pepsi, Costco, and Lowe’s are some of the better dividend stocks to invest in. What are dividends? As a stockholder, you own a part of the company, thus you get a cut of the profits…well, if that company chooses to share that way. Not all companies pay out dividends. Those that do, pay out on a quarterly basis. What’s great about dividends is that they’re not tied to share prices that may or may not reflect how well the company is actually doing. As long as the company is making a profit, you get a little piece of it, even when share prices are lower.
McDonald’s and Target are also good dividend stocks that I plan to add in the future.
McDonald’s, Pepsi, and Costco are also good stocks to have when the economy isn’t doing so great. People are still going to eat at McDonald’s, drink their Pepsi, and shop at discount stores when inflation is high or jobs are scarce.
Adobe (ADBE) and Microsoft (MSFT). These are both software companies that power the business world. They’re hugely important, and most businesses are locked in with these companies. There isn’t a practical alternative to Microsoft for business. Yes, there’s Apple, but it’s more for graphic design, video editing – basically the creative economy. For your more run-of-the-mill, traditional companies, Microsoft is there. Microsoft’s software programs are also the standard for schools and higher education.
Disney (DIS). Disney has been hit hard by Covid. Their theme parks and cruise lines were shut down for months and months due to Covid. Movie theaters were closed for nearly a year. But they have their streaming service, Disney+, which has given Netflix a run for their money. Through this service, they’re also able to stream their brand-new blockbuster movies directly to people’s homes. This cuts out the movie theater’s share, and Disney makes a much bigger profit. This is the future of movie watching. Covid played a big part in making it happen sooner than later.
Still, Disney is going to have rough times for a while. Covid isn’t over yet. This fall could bring a new wave of infections and mandates that limit crowds at their theme parks, and cripple their cruise lines. The silver lining to that is that their stock will remain more affordable to purchase. It’s still a very good company to invest in long-term, regardless of the temporary problems they’re facing.
And my penny stocks! I work in a hospital around surgical instruments and equipment, and I’m familiar with big companies like Stryker and Zimmer Biomet which make surgical instruments and equipment. I might add that they are HIGH PRICED. You wouldn’t believe how much surgical instruments, even simple ones, cost. It’s insane, so I thought I might as well capitalize on the craziness.
Asensus (ASXC) surgical is a new company focused on more precise robotic surgeries. DaVinci is a big name in robotic surgery, but if Asensus takes off in a few years, there’s a chance to have a very nice return. The stock is currently going for around $2. If it is successful, it would be easy for the share price to increase 2x, 5x, or even 10x down the line. But of course, it could flop, so if you invest heavily in penny stocks, known the risks.
Dogness (DOGZ) is another company that I found from the advice of others. They make various products for dogs and cats. I’m looking to buy their automatic food dispenser for my cat that likes to wake me up at 4am because his bowl is empty. I’ve also looked over their other products and think they’re strong. They’re also tapping into Asian markets, namely China. Yes, the Chinese have become devoted pet owners like Americans. Dogness has a humongous market to sell to, and they already have deals with major retailers. The stock is currently going for $1.76. I figured it’s worth a shot, and it’s a fun stock to own.
Well, that’s why I chose each one of the stocks. It’s not complicated. Basically, just find very good companies that have the potential to continue to grow and remain relevant.
This next week looks to be volatile. Several major companies are reporting their revenue, the feds are speaking about bonds (related to a future interest rate hike), and Covid is still a thing. I’ll let you know how things go. I expect a bumpy ride. Hopefully, I don’t chicken out this time.
Oh, and yes, I still think a major correction is to come, though I think it’s going to be different from past corrections due to people like me now in the market. How will we behave? Hmm… I’ll share how I’m guarding against a crash in a future article.