Before reading, just keep in mind this disclaimer: “Don’t you know opinions are like assholes. Everybody has one and most of them stink.”
I have been dealing with some skin allergies for the past month. My cockroach DNA has failed me. They say willpower is limited and I assure you I’ve been using all of my willpower to keep myself from scratching. This time I’ve turned my discomfort into concentration and powered through on several mainstream and fringe topics of stock investing. It has been a weird obsession lately possibly due to the fact that I can use it to distract myself.
You will not see me give much investment advice here. It’s a very personal thing from my point of view. But because I’ve been submerged in nothing but reading, I figured why not write a post on it.
I like looking at other people and their portfolio but spreading out ours feels like internal molestation for me even though we have done pretty well. The only standout thing if you look at our portfolio is probably the $100k we have sitting on the sideline unvested right now. We have been holding that “one hundo” since early August in the money market.
Some might think sitting on cash is dumb. While some investors are sitting on large cash reserves for their own purpose.
For us, it is a reserve and something to experiment with since it’s shavings from the Amazon bush. Emotions are a huge hurdle when it comes to investing. My husband and I are emotionally attached to some stock holdings. Much of that invested wealth we built together, hand in hand. At the discussion of selling few remaining shares of our AMZN, it brings water to my man’s eyes. That financial occurrence happened after we started our married life. It hallmarked one of our biggest fight to date and working out that to start our “true life” together as a dream team 🙂
Dosh: A free app that helps you earn your money back for shopping, gas, and eating out whenever you use your card to make payments. All you need to do is link your debit and credit cards to the app. The app does the rest for you. Dosh automatically redeems real cash and puts it in your Dosh Wallet where you can redeem anytime.
1. Avoid Checking Stock Prices
Like oh my gosh, get a life.
If you’re glued to your brokerage every second of the day “rebalancing” on the drop of a pin, I can almost guarantee it will end badly for you. Willpower has been proven and researched within a limited capacity and each “call to action” on the monitor eats away at that willpower. This was one of my first financial lessons. Before I jumped into topics like budgeting or saving or FIRE, I was moving towards investing and had an online journal called Wall Street Stray (cute name huh!). Hubby and I were naturally frugal and had the basics down but investing was a different animal. Although I thought was a little dry, A Random Walk Down Wall Street is a great classic. I only fell asleep to it, maybe…30 times. Still sufficiently full of great knowledge though!
Anywhoo, what was I saying? Yeah – everyone should be as absent-minded as I am. Check once a quarter or even once a year. It’s better for your psyche.
2. Avoid Mental Priming
Silk, silk, cows drink ____.
Oh my God did you think milk? Hahahahaha no you adorable human, cows don’t drink milk.
And that’s mental priming. Our brains are sort of lazy that way. It’s OK! Let’s all be stupid together forever.
Be very careful where the source of your investment information comes from. Own mental schemas are often tainted by the first touch of knowledge and this creates the selective way we absorb information going forward. You can’t safeguard yourself from tainted information. When you broadcast what you’re holding people will give you their opinions on the subject. It could very well be correct or sourced from genuine care but it could also be from a Greater Fool too. Think how easily talking out loud could muddy your psyche – I don’t use the phrase “internal molestation” often but poking and prodding in your portfolio in front of others is like…a mild violation on the personal finance level. Just saying…
3. Keep Investment Ideas (Mostly) to Yourself
Besides this is a “generally good advice” post, I fully intend to take this advice.
Study the company’s public filing first and remain neutral. The moment you talk about your investment idea, it’s no longer just about the money. Open the floodgates. It’s now also about your ego. Being “right” is at stake! None of this will make you a better investor.
I never reveal my cards publicly so I don’t know how it feels. But I’ve seen tropes of this in real life whenever someone has a favorite sports team and behaves like a maniac after their team wins. It’s pride and emotion before logic.
At our age, we have only seen gains so rightfully I’m the experience newbie. Unfortunately, there is not much I can do or learn about myself right now.
Now I don’t think this rule is a hard rule that must never be broken. Everyone needs a new perspective once in a while and sometimes the advice is damn good! But never fold to someone else’s opinion blindly. You have to choose your circle of competence on investment subjects and remain neutral. POKER FACE IT UP CHICA.
⭐ “That’s Interesting!“
- Panhandling: How Much Money Do Panhandlers REALLY Make?
- How To Make Money As An Instagram Influencer (Internet Fame That Pays?)
- 39 People Who Got Richer AFTER Quitting Their Day Jobs
- Can Being a “Friend-For-Rent” Really Make Extra Money?
4. Don’t Buy or Sell During Open Markets
Being naturally cautious, I usually don’t buy stocks at market prices. I only place limit orders in my Robinhood (no-fee brokerage) after I successfully vetted for what I’m looking for. It will give me some time to reconsider my purchase as it’s going through. The swipe up feel makes it really sobering because I limit myself to no more than 20 individual stocks which makes “space” limited so I better be smart about it. Not to mention for a lower price than I know I can get in a day or few days. Ample time to be sober about that choice. Some people are too concerned with FOMO to mess with limit orders.
5. Stock Tumbled? Don’t Sell for 2 Years
I know we are not the only ones emotionally attached to certain investments. I held on to some stocks that did exceedingly well when I should have sold. It’s hard to let go even though the “train is at your stop” already.
And thennn, there’s always a little pain too when you have to sell something at a loss. I find I suffer very little because I am generally very nonchalant and certainly not heavy-handed to risk too much. However, I still recommend using this same safeguard to void myself just in case. Warren Buffet advised others to buy something as if the market was going to be closed for the next 5 years. Essentially, be firm in your faith and carry on. Do not mind the ever-changing environment of the daily ticker.
I make sure the fundamentals are solid and business is good. Then put yourself at ease, no matter what by holding for 1 or 2 years, no matter the loss. Then cut ties after that 1 to 2 year mark when I feel detached and no longer “care” emotionally.
Sometimes stocks are cyclical. I notice most of my biggest losers within the first few months bounced back stronger around the 2-year mark even though not much has changed to the company performance or backbone. Odd but that’s how it is.
My husband does the cut your losses thing like a pro. But we’re different in that respect and that’s why we have our own Robinhood accounts. I don’t buy into the “salvage” and cut your losses argument because you are carrying over the emotional vulnerability of loss on the backburner. It’s out of a boiling pot into another boiling pot. Not to say it’s wrong, there are great arguments both ways for and against!
6. Be Frugal Boring Freaks
Gee, I’m totally biased wahahaha. There’s a crap ton more to it than that and most of it comes down to temperament actually. But these 3 things were mentioned a lot – albeit not in those exact words – but I shaded in exactly what they meant.
(These texts are all little dry…written by dead old rich guys and such. Ya know.)
⭐ Related Reads:
- How Much Money Does Our Frugality Save? (Spoiler: $56,000+/Year)
- Eat Ugly, Save Money? Imperfect Produce Review (+ FREE COUPON)
- Everything ‘Married…With Children’ Did That Kept Them Poor
When you have a healthy mentality to frugality, you’re going to be less greedy and less pressured to take stupid moves for those riskier gambles. Boring because investing requires a lot of “zen” so if your life is upside down (bad divorce, a sick child, etc.) it’s probably better to step away. You can very well be considered “boring” as an index and mutual fund investor BUT WHAT’S WRONG WITH THAT. Boring is good, what’s wrong with being boring?!
The last one, freak, yeah I can write an entire blog post on why freaks typically do best in life but I’m boarding soon.
These are a few things I grabbed as takeaways that would interest novice investors. Not everything I mentioned will work for everyone. Differences in personality, previous experience and knowledge will make this road your own. See this is exactly why no one should be giving any firm investing advice and definitely not on the internet.
Needless to say, never invest money you’re not willing to lose. That’s easier for some people than others, for us, we don’t exactly care or have anything on the line. Frugality is good like that. You can feel rich anywhere.
After that, the more you move away from the basic, the more it becomes an opinion. I jotted these down for a reason but they’re my reasons. I’ve mentioned before my husband isn’t learning about stocks like I am so this is all me jotting down what appeals to me. Take for example, even in the good times I hated messing with real estate so I exited as gracefully as I could after growing up a little. I knew it was not for me after the adrenaline wore off. I don’t know how other bloggers deal it and like it.
Part of getting older is about learning. Everything above is definitely things to keep in mind but hey, you’re the boss of your money at the end of the day. Just don’t try to be super stupid or overly clever and do due diligence.
Financial Freedom Starts With Saving:
Personal Capital: Sign up and use their net worth calculator for FREE. They are a free financial service platform that helps you analyze your portfolio, retirement, and financial health all on one simple & secure account
Imperfect Foods: We all need groceries. Try out Imperfect Foods to get $80 off ($20 off your first 4 orders.) Read my review of this revolutionary and money-saving grocery delivery service.
ThredUp: The only online recycle clothing store I currently shop and sell with. Great mission statement, company model, customer service, prices, and selection. Sign up with our invite link and you can get $10 free in ThredUP credit.
Survey Junkie: SJ is one of the few survey companies that are 100% legit, user-friendly, and great for making extra money. Earn up to $1,000 a month doing surveys online. You can make anywhere from $5-$20/day in your free time.
Sorry about your skin issues. Not sure if you read my Doctor’s bag review but I found a product that did wonders on my daughter’s eczema. She’s been using it and hasn’t had any issues with itching or dry cracking skin. And it comes from the unlikeliest source:
Ahh it finally died down in just 2 weeks, I’ll look into your recommendation 🙂
Mark Cancellieri says
Cows *do* drink milk. Baby cows do, at least. 🙂
Pfftt hahaha they’re baby calfs then =)
freddy smidlap says
shavings from the amazon bush. ok then. i state my philosophy for buying stocks vs. indexing as an alternate way of looking at things….in other words: independent thinking from the dogma of the echo chamber. i hope none of what i write ever comes off as advice when it comes to holdings. i liked putting them out there, though. it’s an accountability thing for me. i noticed you wouldn’t even tell me your best winner so far. privacy is fine. all the index lovers can laugh when my tech heavy portfolio goes to zero.
I like peering in yours, I wish I had the guts. One of our best return so far has been BPT 🙂
Half Life Theory says
Love the tips, keep it simple and wait. Many will fall for the trap of trading when things go bad…. if only the read or listened to this! Either way, you’re not their mama! 😉
Lol thanks ?
Mr. Tako says
Hi Lily, while opinions ARE assholes, yours seems like a pretty decent one. There’s some really good advice you wrote above.
Enjoy Fincon. Check that flower for drugs. 😛
Flower was LACED with drugs. In jail now. Send help ?
The Poor Swiss says
Nice advices Lily!
The most important is not be emotional about your investments. Pet stocks will never do any good.
I should take this advice haha. I have some pet stock ?
Ms. Frugal Asian Finance says
Woot woot! Have fun at FinCon. I’m so looking forward to your recap post and everyone else’s too! I can’t go this year bc I’m breastfeeding baby girl at home lol Anyhoo, I’m a totally boring frugal freak like you mentioned. Boring is not good for the soul, but it is good for the wallet =)))
Fincon was fun!! Lots of new experiences and a mini vacation with family too. Not so good for the wallet haha, ohh well.
Bernz JP says
I like #3 – keep your investment ideas to yourself. Used to give friends and family members advice on which stocks to buy when I was in my 20’s. Thought they were the best stocks and advice. Now that I’m a little bit older (smiling) I’m more private, and all my ideas are mine, ah, well, unless they ask me.
I’m the same way now ?
Some good advice Lily:) I still check stock prices way more often than I should!
Enjoy FinCon, can’t wait to hear all about it:)
It was definitely a fun experience even in the Orlando humidity. They weren’t kidding about the networking!
Now Lily, are you one of those millennial snowflakes that thinks food is created in the backroom at Trader Joe’s? Having worked on the farm down here in Arkansas I can assure you every cow I know drank milk until their momma made them stop and then they mooed and moaned about the lack thereof for days! I will agree that grown cows no longer drink milk but you didn’t specify the exact age of said cows so I maintain my answer was correct, and also I might be an engineer!
LOL!!! They’re calves then not cows =D
Avoiding checking your stocks constantly and just being boring by not being so active in the stock market are great tips. Most are in it for the long term and we all need to be patience when investing.
Enjoy FinCon Lily!! Wish I could go but I couldn’t get out of work 🙁
Ahh I did remember you said you were coming! Was work that dire?!
SC | MissFunctional Money says
I feel like not enough people factor ego into investment approach. I agree with you — it’s a whole thing.
Great post! Can’t wait for the FinCon update – wish I was there!
Thank you 🙂 fincon was fun. Good for networking!
The Beacon says
Good general tips. Most people will get very emotional about their investments. When they start researching a company and find something they like about it, they will gradually move toward Selection Bias. When the fundamentals of a company starts to deteriorate , they will refuse to see it and keep harping on things they want to see. So many stocks have gone from kky high to almost nothing and left people holding the bag.
I really like Peter Lynch’s Investment Philosophy. The most important of all is Know what you own. For example, do you use any Apple products? Do you like it? Do you use Amazon or Netflix? Do you like them? If yes, then study their fundamentals. Invest in their business. Ignore the noise from their daily fluctuations.
Good point! Consumer companies live and die my user experience.
Young and the Invested says
Making decisions under duress is a surefire way to act hastily in not in your long-term best interests. The thalamus received sensory information and relays it simultaneously to your amygdala and prefrontal cortex.
The former forces the human mind to act on emotional impulse and releases cortisol during moments of extreme stress, which acts as a clotting agent that makes you focus on avoiding the pain.
The prefrontal cortex processed information rationally and attempts to make level-headed decisions based on facts. The problem here is that evolution has given the mind an inherent disadvantage in some ways. The amygdala received information from the thalamus in 12 milliseconds while the prefrontal cortex gets it in 40.
That 28 millisecond differential is great when we were hunted by larger animals or trying to survive in the wilderness. That differential is likely the reason we’re here today and survived this long. However, it can make for rash decisions. If you can wait in that moment of pain for your prefrontal cortex to kick in, you’ll be much better off. Think before acting. That’s how you make smarter decisions.
Holy cow, I need to quote you on that stuff on another post. Great addition!
tee-hee! love this… not enough asshole references in blog posts these days.
excellent advice, Lily. when it comes to investing anyhow. when it comes to real estate rentals, i can’t seem to shut the F up. 🙂
Ah real estate is your thing! That’s one thing that I can’t do, too wild for me 🙂
Words of wisdom spoken like a true mother.
What the heck are you talki- OHHHHHHHHH the title hahahahaha yeah OK, hi sonny boy 😀
Mr. Groovy says
I’m with Cubert. We need more posts that stimulate images of butts emitting bubbles. Great stuff, Lily. And great investing advice.
Hehe thanks for visiting my corner Mr. G 🙂
Ai | The Wise Budget says
Great tips right here! I had this really unfortunate experience when I was a lot younger where I bought some stock, and then when it didn’t go up in value after a few months, I sold it. I looked at it again two years later and guess what? The price had gone up by like 4x. And this, my friends, is how I learned NOT to use my emotions when investing.
K V says
Focus on your immune system
I recommend Garden of Life 100 probiotic (Vitacost best price)
You can take up to 4 x 100 per day…increase 100 per day to 400 maximum.
Day 1 – 100
Day 2 – 200
Day 3 – 300
Day 4 – 400
Day 5+ 400/day
God bless you!
Great list. I think one of the most important ones is not checking stock prices daily. Personally, I day trade so I have to watch the market every day, but I’ve found that my longer term investments do best when I just leave them alone. I even opened up a separate account just to avoid looking at them every day!