Comments on: What I Learned From My First Investment

By: thomas

thomas — Sun, 16 Sep 2007 19:21:46 +0000

i dominated my classroom stock market game. My team bought 3 penny stocks. Didn’t know anything about them, just saw them in the paper. i believe it ran for 2 or 3 months, but at the end we had some crazy rate of return. One of the stocks jumped a nickel or whatever and that was pretty much it. Everyone else bought blue chips and saw little or negative gain.

Worked for play money, but no way I’m doing that with my cash.

By: Reasonable

Reasonable — Sun, 16 Sep 2007 06:18:16 +0000

>> If you’re watching your stock every day (or even every week) then you’re probably trading way more often than you should

I’m not sure I agree: all my investments are in some kind of an index fund (s&p 500, wilshire 2000, some foreign indexes);I sold zero stocks in the last 5 years (I bought around 80k worth of stocks throughout that period), but I watch the market daily.

Might be a family tradition; my uncle used to drive by the bank every Friday to ‘go and visit with his money’. So there you…

By: Meg

Meg — Wed, 12 Sep 2007 21:31:06 +0000

I agree with all your points.

Investing in the short term IS gambling in the stock market, especially if you’re an individual investor–we have limited, imperfect, and even sometimes unreliable information on stocks, companies, and markets. Plus that info reaches us long after company owners, investment firms and institutional investors have acted on that information and moved the market/stock price.

If you’re watching your stock every day (or even every week) then you’re probably trading way more often than you should–meaning any gains you DO manage to make are wiped out by short term capital gains taxes and/or commissions.

By: Jason

Jason — Wed, 12 Sep 2007 00:48:19 +0000

I played a similar game when I was in 7th grade. I don’t remember what my team invested in, but I do remember the team who won didn’t invest anything and just collected 3% interest on their play money. All of us lost money in the end, except them… Figures.

By: Jon @ The Money Mythos

Jon @ The Money Mythos — Tue, 11 Sep 2007 18:47:49 +0000

Good advice overall, at least for value investing. A growth investor wants to watch his stock every day, or close to that, ready to pull the plug if bad news comes out, or it drops below his limit price.

By: J Cantoni

J Cantoni — Tue, 11 Sep 2007 17:54:54 +0000

Geez,

I think you were on to more than you know. I looked up the price of CAT in Jan 1991, the approximate time of the first Gulf war. It was selling for about $ 6 a share. Now it is selling for $72 a share. 1200% return. Granted it is 16 year later, but geez, that’s not bad. Maybe you were smarter than you thought.

By: PiggyBankBlues

PiggyBankBlues — Tue, 11 Sep 2007 17:12:14 +0000

“Don’t watch your stocks every day” is definitely prescient advice for this markets wild ride! My mom is giving herself heartburn watching the Dow gyrate.

By: iarenoob

iarenoob — Tue, 11 Sep 2007 15:31:37 +0000

I don’t think the stock market is gambling if you know which investments to invest in. When I pick my stock, I typically look at their financial sheets. That way you can tell if they are moving forward or are trying to move forward. I have been successful so far this way but you can’t account for certain things that happen in the news like someone resigning and such.