My First Experience With The Stock Market
March 18th, 2021
It's great to have you here today. I believe that you are curious about my experience with the stock market, well, there are things I will like to share with you.
I'm not a financial analyst or am I a seasoned investor. Rather, I'm just a person who seeks financial freedom now and then, and I keep looking out for avenues that will help me achieve that — I hope you look beyond this story.
I'm very certain that you've heard the words, investments, stocks, shares, equity — I believe that majority of us have heard those words. But very few of us know or understand what those words mean, how it applies to the real world because only a fraction is exposed to financial education. The reason for that minimal exposure is because "Financial Education" is never taught at school, sometimes I wonder why it is not part of the education system because a large percentage of humans strive to attend schools to attain one or more certifications to better their lives.
Maybe the goals for setting up a school do not include making the students rich — I don't know either. And, I also don't understand why a skill that improves the human lifestyle is not made available easily — socialism??.
Back to me. Like I mentioned earlier, I'm not the most knowledgeable about finance, so whatever decision you take afterward (reading this post) is yours and yours only.
First, I'm a software engineer, I tinker with computers most of my time, building solutions to improve users and businesses. I know most people will say that techies are well paid right now (during this ongoing pandemic), why bother yourself. Well, I can't tell you if that is true or not.
While growing up, I always love the idea of having a fat bank account and living soft life. Well, you can't guilt-trip me for that because living in Nigeria automatically gifts you such a trait. Like most Nigerians will say — who no wan chop life?.
To actualize that idea I started surfing the web for answers, passing questions to people I deem knowledgeable on how to have a fat bank account. I did get numerous answers like fixed deposits, trading cryptocurrencies (the shining kid right now), starting a new business...stocks. Out of the list of answers I got, Stocks caught my attention. Why? — I love the idea of owning a piece of a company that has high chances of becoming a unicorn in the future. Who does not want that?
Like war, you can't go to the battlefield without an arm else you might be killed in less than a minute, even with an arm there is still a chance that you will be killed.
So, I started arming myself by reading what terminologies are used in the stock markets, understanding what a symbol means, 52WK High, 52WK Low...Learning this new stuffs is fascinating and interesting. For every new exploration, there will always be a challenging object that you do not know about, and it's Financial Statements for me!!! 😕. I believe this is as a result of me not having accounting experience.
And I'm also happy to mention that I've found the usefulness of the stocks app on my device and laptop 😆. I was always wondering when those applications will become useful to me, I've thought of uninstalling them a couple of times 😌. I'm glad they've found reasons to stay on my devices.
Finding A Platform
After arming myself with the basic training, I started looking for a platform that will help me trade stocks easily in the US market. Apparently, over the past 2 years, there have been multiple companies providing platforms where Nigerians can trade in the US stock market, and they've been doing very fine. We have the likes of Investbamboo, Rise Vest, Chaka, and others.
After some discovery, I did go with Investbamboo because it was the first I was exposed to, through some certain handles that I follow on Twitter, though I have not heard any bad stories regarding the other platforms that provide the same services. I didn't want to be biased here but I needed the security and that's why I had to follow the big guys.
At this point, I had completed the registration on the platform of choice, Investbamboo, and I've made a $50 deposit, I know it's not a huge amount but I've heard sad stories and I had to play safe — I'm not ready to lose a huge amount in a market I have no experience about.
Before the deposit was approved I had made my research already by going through the stocks list to find what companies I can afford. I thought I wasn't going to find one but I did find stocks with buy price as low as $1 — isn't that amazing.
I spent $40.20 purchasing 11 shares in 6 different companies — 2 in the pharmaceutical industry, 2 in the energy sector, 1 in the traveling industry, while the last company belongs to the shipping sector.
I still have about $9 to spend. I'm targeting the technology industry, I believe 2 shares of #NOK should be worth the buy when the market opens next.
My first-day experience was mostly spent buying stocks and getting used to the dynamics of the market and getting familiar with the platform I use in trading. It was fun looking at the prices go up and down and I can't tell what was driving the changes. I believe that I will get used to it and also understand what forces drive the market.
So, an hour before the close of the market, I decided to view my portfolio to see how I'm faring, to my surprise I was doing pretty good, all stocks I purchased were up. I was enjoying my first day because it was going in a positive direction until I decided to check my standings after the close of the market — Omo!!! everywhere just red 😬. I was losing about $1 or more.
The second day was a positive one, 5 of the stocks were up in a positive shade while one stock cost me some loss but this time around my total loss is reduced to $0.84, even though it's few cents from a dollar I still felt good.
I feel I will do a great job going forward as I plan to invest more money in stocks, and I'm also braced for whatever loss comes thy way because this isn't the first time losing some cash 😞. I think next week will provide more insight to help me grow, but my strategy is to hold for long — long term investment.
I'm on the lookout for companies that will be going IPO this year and also have great potentials for growth.
For every new voyage it's always good to seek knowledge from someone more experienced than you are, and below are tips/points I got from someone willing to guide me, these tips are regarding the long term strategy;
- Daily monitoring of your owned stocks will make you more susceptible to emotional swings, and emotions are dangerous in investing.
- It would make it difficult for you to hold for as long as you initially planned as time appears to pass slowly when we're not doing anything interesting.
- You would be more receptive to bad news about your stocks when they're down, which will lead to a sour mood, and this will have negative a impact on other areas of your life.
- You would be tempted to sell as soon as there's inflation i.e. you risk becoming a day-trader, and most day-traders lose money.
I look forward to writing more about my investment journey as I pass through the thorn path, I know it's never an easy one but I'm convinced it will be worth it in the end.