By Virginia Allen
Ever since I was a little girl, I have had a fascination with the stock market. Perhaps it came from my grandfather, who, as a banker, took great care in how he spent his money, including his stock choices. My grandfather did well in the stock market but fell prey to one of the oldest mistakes any investor can make, and it cost him a great deal of money. The vast majority of investors have lost money at some point—it’s part of the learning process. This reality can scare some potential investors away, but it shouldn’t.
I will never claim to be an expert in the stock market, and I won’t label the tools below as investing advice—I’ll leave that to the professionals. But what you should know is that anyone can invest in the stock market if they follow a few simple rules. The investing principles below are all you need to begin, and if you try these and enjoy the results, then I recommend taking a course to gain a deeper understanding of the market.
There are lots of user-friendly mobile apps to begin your investing journey. I have used both Stash and Robinhood and have been pleased with my experience on both platforms, but I prefer the features of Robinhood a bit more.
Once you choose a mobile application, the next step is selecting your stocks. I rely most heavily on advice from trusted friends who invest, recommendations from professional investors, and news reports on the market to guide my decisions.
Buy Low, Sell High
When considering buying a stock, begin with the oldest advice in the book: buy low, sell high. To do this, look at the history of a stock. What was the price five years ago, a year ago, and last month? Look for trends. If a stock is at a one-year high but tends to trend downward every three to six months, it might be wise to wait to purchase it—unless there is a very strong reason to believe it will continue rising.
Most stocks fluctuate significantly, and waiting to purchase a stock until it is trending downward can be a great opportunity. This can feel counterintuitive, but I always get excited when a trusted company with strong potential has a bad earnings report—it just means it may be the right time to invest.
Watch Your Stock
Now that you have a few stocks, watch them closely. I recommend checking the price of your stock every day. That way, when it hits a one-year high, you’ll recognize it right away and can act quickly to sell.
You can also set your mobile app to automatically sell your stock when it reaches a certain price. This is a good idea if you are very busy or investing in a highly volatile stock. Otherwise, I think it is helpful to do it manually so you stay intentional about learning how the stock moves and what is or isn’t a good price.
You Marry a Man, Not a Stock
Money can easily become emotional. This is why you should never invest money you can’t afford to lose. Investing is not gambling—if you need the money for bills or a vacation, don’t invest it.
The temptation when a stock goes up is to hold onto it longer because it might go up—and it often will—but it could just as easily go down. You are never married to a stock, and acting as if you are can cost you a great deal of money. This was the mistake my grandfather made, but he is far from alone.
This is why I keep a list on my phone titled “Stock Pull-Out Prices.” When I purchase a stock, I decide what price it reasonably needs to reach for me to call it a good investment. I write down that price, and it becomes law. Once the stock reaches that amount, I sell it. The urge to invest emotionally should always be resisted.
Keep Going
Finally, when you sell and make a profit, buy another stock, and keep investing. The longer you do this, the more money you can make. It also gives you a little more psychological freedom because you are largely investing with profit instead of your hard-earned paycheck.
Now you are ready to start investing!
ABOUT THE AUTHOR
Virginia Allen is a podcast host and senior news producer at The Daily Signal, where she co-hosts the “Problematic Women” podcast. She covers immigration, border security, Israel, and national security.
Originally from New England, Allen earned a government degree from Regent University. After a year in South Africa as a missionary, she began her media career in Washington, D.C. with The Heritage Foundation and The Daily Signal.
