I bought my very first stock at the age of 18 in the fall of 2005. Ford stock was my investment of choice with 10 shares bought, which at the time was trading around $10 per share. I was super excited to be an INVESTOR! Next I was running to the school library everyday to check my stock price, this was before smart phones. An obsession over Ford occurred while I owned the shares. The purpose in buying the shares was to become super rich through the stock price all of sudden sky rocketing in price. It was a little ridiculous. My first investment lasted about 6 months before I sold them at loss of about 20%. That’s what I call a serious return.
I can’t remember exactly when I bought my shares but here is a good approximation:
- Bought: Aug. 1st 2005: $10.85
- Sold: Feb. 1st 2006: $8.66
If it was opposite day I would have made money.
How I picked the stock
I chose Ford because it was a company my dad admired and talked about when I was growing up. Other than knowing Ford was a household name I had no investment strategy in picking the stock. This is exactly what not to do.
If you are buying your first stock I recommend developing an investment strategy. There needs to be a method for choosing stocks for your portfolio otherwise you’ll be vulnerable to choosing whatever company looks good to you at the time. My investment professor at Rockhurst University always preached developing a method. Every great investor has one, there all different, and they all make money. But you need to create one for yourself. This will help you focus when you’re researching company’s to buy.
Where I bought the stock
I bought my first stock through Sharebuilder.com. Sharebuilder.com has since been bought and its now owned by Capital One. I’m not sure how the site operates now, but Sharbuilder.com was great. You could buy shares for a flat fee of $5.95 per transaction. There are a number of companies that offer this service. I currently use USAA.
What I learned
- Don’t buy stock and expect to get rich over night.
- Don’t do all your research on the company after you buy the stock, do it before (crazy idea).
- Have an investment strategy to help choose the stocks to buy.
The key to building wealth is having the discipline to save a little every month and let your money compound.
I hope you found this helpful.
If you think someone would benefit from reading this article please share it with them.