I'm a Sucker for Free Stuff

 My Daily Market Reflection - Brace for a Pullback:

I plan to start every post with a reflection on how my stocks are doing on the day I post. I’m going to be very honest with you. Today was not a green day for my portfolio or for most of the market. I had expected this. My portfolio went up a whopping 13% this past week and if I’ve learned anything, it’s that when things go up, they must go down. Whenever you see immense growth too quickly, brace for a pullback but don’t be alarmed by it because it usually never pulls back as far as it grew. Ladies (and dudes with man buns), think of the market like a hair elastic (thanks dad for the help on this simile). When you stretch out a hair elastic, eventually you let it go and it snaps back almost to its original size (key word being almost). It usually never shrinks back to the size it was before. It’s a little bigger now but still you had to stop stretching it or it would eventually break. That’s how the stock market works too. If there’s too high growth in too short of a time period, the market is eventually forced to correct itself (more on this later). So, my portfolio was over-extended and due for a pullback (3.96% to be exact). Looking at the after market hours activity, it’s already gone back up .17%. In short, I’m not worried. However, 6 months ago, I would have been panicked! Hopefully my reflections can help ease some of that initial discomfort with putting your money in someone else’s hands. 

My First Stock:

Sabre (SABR) was my first stock I got (the free one). I got it on June 16, 2020. Sabre is a company that provides technology solutions to the travel and tourism industry worldwide. Not the best stock to get in the middle of a pandemic when most planes have been grounded to slow the spread of a deadly virus that’s infiltrating the world. It was trading at $9.25 a share but it was free for me (I ended up trading it shortly after).

I remember just watching those big name stock prices rise and fall and fall and rise with each passing minute and I became hooked on that very first day. It was all so exciting. I could make money while parking my butt on the sofa and watching it grow. Easy right? Wrong. 

That same day I deposited $100 into my Robinhood account. Then for kicks I threw in another $100. Then, I got to work. I downloaded this app called MyWallSt.Learn. I believe they have a website as well. This app is the equivalent of a small text book on the basics of the stock market. They even have a listening feature also so you can read or listen or read and listen (I read and listened). I knew absolutely NOTHING about the stock market and this app was just the thing I needed to get started. It took me a week or so to get through all the learning modules and sometimes I had to re-listen to them more than once because my brain rejects numbers (hello, English major brain). 

If there was a concept that was particularly tricky (p/e ratio for me) I would stroll over to youtube and watch as many videos on the topic as I could until I understood what it meant. There are SO many youtube videos out there on the stock market and they’re super easy to find. So if you find yourself learning about a concept that your brain just can’t process, it’s okay to pause and head over to youtube. 

I also found myself just pausing periodically to let my brain catch up to what the app was explaining. This is something they tell you right away in teacher school - brains are not perfect and sometimes they take a little longer to catch up to what’s going on. Give your brain that time to do so. Another little learning strategy I have to offer is don’t sit down and go through all the modules at once. Almost nobody has a super brain that can perfectly process that amount of information at one time. Do it in small amounts (in teacher world this is called information chunking). Listen to one or two lessons in a unit at a time then get up and move around or have a snack before returning - or take a longer break if needed. Movement is very good for the brain. Studies show that the brain can’t process more than about 10-15 minutes of information at a time. Give yourself this needed time to learn and you will be so much better off than if you cram. 

Sorry, I went off on a teacher tangent (can’t promise that won’t happen again!) back on the stock track, the price to earnings ratio, or P/E ratio, was particularly tricky for my math challenged brain. Here are a couple videos I found helpful in case you also have this struggle:

1. https://www.youtube.com/watch?v=4KkTGx2bK_4

2. https://www.youtube.com/watch?v=yIX6d79Q4aA

As I was listening to these modules, I was also going back and forth to Robinhood to see how these aspects of the market looked on Robinhood. For example, when the module discussed what a 52 wk high was, I would go to Robinhood and try to find that information on a stock’s page to try and understand it a little better. I would also try to find these things on yahoofinance because they give a lot more information on the stock than Robinhood. For example, you can find a company’s balance sheet on Yahoo (still learning how to read one of those daunting things). 

You’re going to hear me talk about Robinhood a lot. That’s because it’s the brokerage that I feel most comfortable using. It’s a great stock brokerage for beginners because it’s super user friendly.  I also have some money invested in Fidelity because Fidelity provides many more resources and information to learn. My point here is, there are plenty of other ones out there as well and you should definitely do your research before selecting one that works for you. I’m telling you about my journey, but ultimately, you will embark on your own stock journey and it’s important that you feel secure in the decisions you’re making for your future.

Back to my journey, this isn’t about you yet. As I was learning, I began buying stock. I played it safe at first and bought big company names like Disney and TJ Maxx (not giving you the real names because I don’t want you running out and buying them because I said so). Despite the pandemic, I knew these kinds of companies would turn out okay in time. I didn’t want to make any risky trades while still in the learning stages (I have also since sold these stocks - nothing personal, I just had my eye on bigger growth stocks). 

A couple days in, I bought this book called A Beginner’s Guide to the Stock Market. It was very short and took me a couple days to read. I took notes in it as I read (that’s called annotating and it’s good for your reading comprehension - once an English teacher, always an English teacher). This book basically said all the same things that the app said but hearing it again and from a different perspective, allowed me to further process the knowledge I had already gained. Again, I used my teacher super powers to own the stock market (jk). 

In addition to these steps, I also began having $20 directly deposited into my Robinhood account each week. All the books tell you that small amounts over time make a greater impact than large amounts all at once so that’s what I did. $20 was manageable for me and you have to decide what’s going to be manageable for you. PEOPLE, I have a not so secret secret to tell you: I am NOT a saver (more on this later) but I find myself getting excited when that deposit hits my account because it means I can buy more stock and make more money. 

I have SO much more to tell you but you have homework to do - or maybe you don’t - maybe you just like reading about my journey and in that case thank you for silently supporting me and I love you bunches. Or perhaps you hate what I have to say, think I’m boring or unhelpful and you’ve vowed to stop reading altogether. That’s between you and your god. Either way, I have two cute fur babies that would very much like to snuggle after a hard day of freeloading so I need to direct my attention to them (they're very needy - especially Ollie). Happy trading!