Robinhood and Investment Advise
Posted by Umair Abbasi on Oct. 4, 2017 in Finance
Robinhood (shameless referral link) is this amazing app that lets you easily invest in stocks with no commissions. You can instantly buy and sell stocks you like. It has a beautiful interface that just lets you see key information at your fingertips. I can't recommend it enough after using it for the last 12 months and having an annual 35% return on my investments.
My Thoughts on Investing
My thoughts that follow are just that. Thoughts. They aren't professional investment advise. They aren't this is what's going to make you money. And honestly it's not to be inundated with requests for stock tips. Overtime each one will have built their own thoughts and we would love to hear about your raw personal thoughts.
I am starting with taxes. It's not to discourage but just to make sure you are aware. You will be taxed on your gains from the investments. These are gains on stocks you have sold in the given tax period. So if you have bought alot of stocks and haven't sold any and made gains on it you probably don't owe anything for your investments that given tax period.
The second part is the tax filing. Even if you haven't sold any of your investments or have nothing to report you still have to file though. Some folks out there would be like oh I have to file another piece of paper with my taxes every year. Yes. In some circumstances depending on how you file, that could be an additional expense. Please do your research.
I do want to repeat this though. It's not meant to be discouraging. Figure it out, ask yourself am I willing to being an investor and file that additional piece of paper.
How much to invest?
A billion dollars! IF you can afford to lose it. It's that simple. Start with an investment strategy with money that you can afford to lose. Whatever that number is use that amount to learn, experiment, and go through the beatings of losses and successes of gains.
I guarantee this. You will scale that investment higher over time when you know you are ready. When that happens is different for everyone. But please do not plan on investing all your savings with the expectation of large gains instantly. If only it was that easy.
What should I invest in?
For some folks this part of the tips would be really clear and for some it would require some digging. Invest in your passions. Something you read about everyday. Information that intrigues you. For some folks that maybe Apple, Google, Amazon, Tesla, Facebook, Twitter, and others.
For some it wouldn't be as clear. The best way to dig further on your company of choice if its not listed on the stock market is figuring out the different components of the product. Maybe there are circuit chips installed in that product that you love which are provided by another supplier. And if you learn they are going to stick to using those chips for a ver long time and you see their expansion tied in with the use of those chips, buy stock in those chips I guess. Dig.
Long Term vs Short Term Investments
Do both! This is another one of those strategies that are different for each. Over time you will have your own comfortable level. Mine is till Bullish. I would go in strong on something and sell off once I know it's not going any higher anytime soon. So I would invest on the dips. The stock would fall I would invest. The stock would go up I would sell. But what I would do is sell all my stocks. What I should have been doing was asking myself do I believe its value is much higher over time? And if the answer is a consistent yes, I should have left a few stocks behind for the long run.
A classic example. Back in November 2016 is when I started investing. Bought a few stocks of TSLA (Tesla Inc.). It was around $180 each. By early morning the next day it went up by $4. I was so super excited. I just made profit!! Sold it all. TSLA touched $383.45 June 19, 2017 and is sitting at $348.14 as of now. I could have almost doubled my investment by leaving a little behind. I knew it was worth alot more than that. But the opposite could have happened too. TSLA for instance may have started having alot of issues with batteries in their cars, production slowed down, couldn't deliver on solar energy, all negative factors that would have affected the stock negatively.
I am sorry, what? Nobody knows what a stock is going to do with a 100% certainty. It's math, historical data, political climate, organizations long-term business strategy, and many other factors. Please don't allow someone to tell you buy this stock now. Do your own research. Take the advise from that 'expert'. But make your own conclusions.
Happy investing fellow investors!