Stocks

Stocks is such a HUGE part of the economy and in finance in today’s world. Most people see stocks as a gamble, quick and dirty way of making fast money. But NO that is somewhat completely wrong. Yes stocks are a gamble, but no it is nowhere near making fast money unless you take incredibly risky gambles and trade in high risk category stocks.

Stocks are an investment. Some stocks payout dividends every quarter which is the same as receiving a small token for owning a company’s stock. Normally established companies such as Microsoft or Intel will pay out dividends. People re-invest these dividends back into the same company and take advantage of compound interest. This is the moneymaker here. The process of stocks earning income is from this simple formula: Buy stocks at low price, sell stocks at high price. But when do you sell?

When to sell is the biggest what-if moment ever. Do you sell now when you see a 10% increase? Or do you wait 5-10 years later for the stock to increase maybe 60% or even 120% increase. That is exactly what happened with nVidia. They jumped from selling at just $10 a piece average 5 years ago, to a whopping $114 a piece now in 2017. That is a 680% jump. If you had invested just a mere $500 into nVidia, you would have come out today with $3,400. Maybe if you hold onto those same stocks for another 5 more years, when autonomous cars become a norm and are powered by nVidia chips, they may be worth as much as Amazon at $810 a piece.

The big if, is an answer that starts with you. But there’s many of you and only one of me. Therefore, I will describe my own financial situation and let you decide for yourself how closely do our situations match and if you should follow my footsteps.

I started out trading on RobinHood. This is an internet broker who deals with buying and selling stocks. Traditionally, you would have to go into the stock exchange market physically located in coffee shops turned business buildings. However, now because of the Internet, we are able to trade stocks through brokers online. They deal with the stock market exchange and all the paperwork, the grunt of the work. However, they give us an easy-to-use interface to buy and sell stock. RobinHood is an app that gives you a summary of all stocks available to you to invest in, and a method of withdrawing money from your bank account. This app is geared towards millennials who are starting out their financial lives. From starting just over month ago, I have earned myself $63. That does not sound like much, but coming from just $500 in investment into nVidia, I am proud to say that I made a 12% gain on my money. I put in no work at all, except maybe 10 minutes of my time to register and set up my account.

However, I have no intentions of pulling out my gains. I am going to continue contributing to my investment profile by searching for more stocks to invest in. Because I aim for 10 years into the future of investing, I am going to place my money into not-so-risky stocks such as Intel, Microsoft, and Nvidia. But I also like to take risks, so I am including myself into stocks such as Fitbit, AMD, and PayPal. These stocks I do want to profit from within a shorter time frame, but if they do continue to rise in success, then I will continue waiting until they start to dip, before I sell.

All in all, it depends on you. I follow this simple principle: Treat stocks as money you will throw away and potentially lose all of it. But I take that with a grain of salt and follow another principle: Invest in companies you believe in. In today’s world I believe in Nvidia, Intel, Microsoft, Visa, Disney, Amazon, Et Cetera. These companies will not be going anywhere anytime soon and so I regard them as safe, slow money-cookers.

My personal stocks I follow:
Nvidia
AMD
Intel
PayPal
Fitbit

If you have any questions or concerns, please go ahead and leave a comment below.