Personal Experience
Investing is by no means a simple process; there are countless considerations that must be paid, and infinite risks along the way. A quote that I've invested by for the last ten years is:
"...If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored."
- Peter Lynch
For me, it all began in 2005. From all the gifts and presents from my aunts and uncles, I had collected over $3000. This money lay dormant in my Washington Mutual bank account. I was satisfied with the couple dollars I used to make on interest every year, until my dad suggested that I invest the money in some stocks. With the help of my parents - matching my $3000 and providing me with some advice - I invested more than $6500 in Qualcomm (QCOM). At first, I was scared. I didn't know what I was getting into. I was barely nine years old. Nonetheless, I had a solid understanding of how the markets worked, why prices went up and down, and how to do research about a stock's potential. Before purchasing 200 shares of Qualcomm, I knew about the stock's P/E, dividend yield, and market cap.* As a upcoming and developing company, Qualcomm proved to be a very profitable investment for me. Within a year, the stock price rose from $34.45 to $45.30. By 2011, my investment had more than doubled. This single speculation was just the beginning of my trading experience. Soon enough, I diversified my portfolio and discussed possible ventures with other investors. Today, I hold shares in more than 20 companies and yielding a profit margin of more than 75%. I have encouraged more than five of my peers to begin trading stocks and they have had great experience in their investments. Sometimes you get lucky, sometimes you don't; but if you make smart and sound investments, you really don't need luck...
*P/E - The ratio of the price of a stock to the amount of earning per share.
Dividend Yield - Payment made to a shareholder by a corporation, usually as a distribution of profits.
Market Cap - Total dollar market value of all the shares outstanding of a publicly traded corporation.
"...If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored."
- Peter Lynch
For me, it all began in 2005. From all the gifts and presents from my aunts and uncles, I had collected over $3000. This money lay dormant in my Washington Mutual bank account. I was satisfied with the couple dollars I used to make on interest every year, until my dad suggested that I invest the money in some stocks. With the help of my parents - matching my $3000 and providing me with some advice - I invested more than $6500 in Qualcomm (QCOM). At first, I was scared. I didn't know what I was getting into. I was barely nine years old. Nonetheless, I had a solid understanding of how the markets worked, why prices went up and down, and how to do research about a stock's potential. Before purchasing 200 shares of Qualcomm, I knew about the stock's P/E, dividend yield, and market cap.* As a upcoming and developing company, Qualcomm proved to be a very profitable investment for me. Within a year, the stock price rose from $34.45 to $45.30. By 2011, my investment had more than doubled. This single speculation was just the beginning of my trading experience. Soon enough, I diversified my portfolio and discussed possible ventures with other investors. Today, I hold shares in more than 20 companies and yielding a profit margin of more than 75%. I have encouraged more than five of my peers to begin trading stocks and they have had great experience in their investments. Sometimes you get lucky, sometimes you don't; but if you make smart and sound investments, you really don't need luck...
*P/E - The ratio of the price of a stock to the amount of earning per share.
Dividend Yield - Payment made to a shareholder by a corporation, usually as a distribution of profits.
Market Cap - Total dollar market value of all the shares outstanding of a publicly traded corporation.