I never in a million years thought I would write a post on investing, but this blog is devoted to helping coaches in any way I can, so here goes. Just over a year ago, in October 2019, I was 46 years old with little to no savings. I ended up taking off coaching the year of 2019 and I really focused on my teaching and had the most enjoyable year of teaching ever. I did the Stock Market game with my Seniors, and that helped me to begin this journey.
The time off from coaching was a blessing in disguise and I was able to finally plan for my family's financial future. I did very well this past year and was able to more than double my money. I am not a financial guru by any means, so please do your own research because the market is volatile and today's genius can be tomorrow's fool.
Let me start off with some background on myself. I am a workaholic Coach like most of you reading this and I never had much time to worry about finances (or basic things that normal people do like regular visits to the doctor, etc.). Taking the year off coaching allowed me time to take care of this severely neglected area. I have been poor pretty much my entire life (coaching in Florida for a long time did not help either) and I know if I can do this, anybody else can.
I had a couple of 403-b accounts that had done poorly in the past, so once I starting having some success in the market, I ended up cashing out those 403-b's to put into my IRA account. That was one of the best things I have ever done because those 403-b's were dogs. I have had one for nearly 20 years and it hadn't done jack squat. Now, that money is kicking butt. I paid a small penalty for withdrawing one account, but I made up for it and then some. I ended up timing it up where I finally got my money from those 403-b's when the market was way down after Covid first hit, so it increased significantly.
Ok, let's get into the nuts and bolts of getting started. The first thing I did was to open an account to buy stocks. Charles Schwab has free online trading and they are very reputable so I went with them. Robinhood is another popular company, but the problem with them is that you have to wait five days to buy after you make a deposit. That's a LONG time if you are trying to buy something at a certain price. The market isn't going to wait for you, you have to be ready to buy when big-time opportunities arise. The only thing I use Robinhood for is to buy cryptocurrency, which I will get to later.
I opened up two accounts on Charles Schwab. The first was an IRA account, which is my long-term investment account, similar to a 403-b or a 401k. The second one was an Individual account which is money I can access for fast cash if needed. I only keep a small amount in my Individual account and I can cash it out quickly if I need money for something. You can take money out of the Individual account without worrying about a penalty (only thing is that you will be taxed on what profit you make). The IRA account is money you will not need any time soon and plan to keep in there for a long, long time, so be careful not to put too much in there initially. You can always switch money from your Individual account to your IRA, so invest in the Individual account if you are not sure if you will need it soon or not.
The next important thing is which stocks to buy, who to listen to, and where to do research. When I first started, it took a while to find reputable sources. I bought and sold a lot of mediocre companies and it took a while to get rolling. Charles Schwab is great but their recommended stocks are often losers. Also, some of the best stocks will have a F rating. I could care less what they are rated by other people if they are making money for me.
There are a tons of places to find advice but the place I recommend most is the Motley Fool. Their stocks make money and they have a good feel of what new technologies are the best to invest in. I have started to follow a few financial people on twitter and here is a link to the Investment List I made if you want to see some people to follow.
My main man to follow is Daniel Sparks, who works at Motley Fool. He is very tech-savvy and has a good feel for what companies have what it takes to make it big. He recommended two of my three top holdings: Fastly and Magnite and he has helped me tremendously.
As far as tracking your portfolio, there are a couple of sites I would highly recommend. The first is tipranks.com, where you can input your holdings and have it track your performance. Charles Schwab has good information too, but if you want to keep a tab open and have it keep up with your stocks and not have to refresh the page. It also lets you compare your performance against other stock traders, which is pretty fun if you are the competitive type (pretty much everybody that reads this blog). The other is marketbeat.com, where you can get the latest news on your top 5 holdings. This is helpful when you are freaking out and asking yourself, "Why is my stock going down today?" The world likes to say you shouldn't put all your eggs in one basket, but the opposite is true in investing. Andrew Carnegie said, "The way to become rich is to put all your eggs in one basket and then watch that basket," and this site helps you to keep a close eye on your biggest stocks.
If you're a Coach, you like competing. Here are my numbers so far. June and November of 2020 were pretty good months:
It is better to have fewer holdings and less stocks to keep an eye on, especially if you are a football coach and are busy enough already. With that being said, here are my top holdings as of December 10, 2020.
Fastly (FSLY) makes internet sites run faster, and it has made me a lot of money as I sold a lot of my shares this summer to help buy a house. I didn't really have enough money for the down payment and Fastly started on a tear, so I sold and put all my chips on the table for Fastly and let it ride. It skyrocketed the month of June 2020 and I ended up with enough money for the down payment thanks to that run. Even though you can't get too attached to stocks, this one will always have a special place in my heart. It is very volatile and my whole portfolio went down nearly 17% in October when the TikTok situation went down. It has went up a good bit since then. It is important not to freak out and get mad and sell everything when a stock goes way down in one day. If you know a company is good, these bad days are when you buy more.
It is important not to freak out and get mad and sell everything when a stock goes way down in one day. If you know a company is good, these bad days are when you buy more.
Tesla (TSLA) is a freaky stock that defies the laws of investing. Tesla is more than a car company, it is battery and software technology and built on faith in Elon Musk, who is currently the world's second richest man when he isn't launching rocket ships and other crazy stuff. Tesla dipped 18% a few months back when it didn't make the S&P 500 (it will be in now), which was a knee-jerk reaction, so I added quite a bit to my portfolio, and it was a very good decision. I will probably sell off some shares soon and buy more of my other stocks.
Magnite (MGNI) sells digital advertising to connected TV, like Roku. It just went up over 100% in November of 2020, which is extremely rare and awesome (100% means it doubled) and is up 215% this quarter (doubled twice!). It did nothing for a long, long time but Daniel Sparks said it was his number one holding coming into 2020, so I kept the faith; and when it started showing signs of life, I bought quite a bit more and it soared in value to become my #3 holding.
Ethereum is not a stock, it is a cryptocurrency, like Bitcoin, but so much more. Sean Williams of Motley Fool said, "The real value of the crypto revolution is the underlying blockchain technology. Buying bitcoin gives investors zero ownership in the underlying digital ledger." Ethereum is the blockchain that Bitcoin runs on. It is currently a distant #2 to Bitcoin in popularity, but blockchain can potentially be as disruptive of a technology as the Internet. Blockchain technology will one day allow you to get onto the taxi blockchain and compare driver ratings and pick a ride by yourself without using a middleman like Uber.
You can buy Ethereum on Robinhood, which is what I use it for. The other blockchain crypto I own is Cardano, which has to be bought elsewhere and stored on a digital wallet. It is a bit of a complicated process that I am looking to streamline (I will update how to buy here when I get it figured out). I use an app called Blockfolio to keep track of my crypto that works okay, but I would like an app that could also show up on my desktop.
The Trade Desk (TTD) is similar to Magnite in that it deals with advertising to connected TV, but it is on the buying side. It had a monster year thus year, increasing over 300%! If I were really smart, I would have more of it, which I plan to do soon.
Other holdings:
Twilio (TWLO) - I like this one long-term and it has been doing better after a slow start. It allows businesses to communicate easily with users via voice, text, email.
Roku (ROKU) - I will be adding to my position soon—like this one a lot. It allows your TV to work like your phone.
Digital Turbine (APPS) - my brother got me on this one and it has went up almost 300%. It may go up more, but I can't be sure since it is a smaller company and there is not as much available research on it.
Microsoft (MSFT) - this was my top holding before Covid and was doing great, but it hasn't done much since then, going up only 9%, by far my worst holding. This is a safe stock and it pays a small dividend. I will probably buy more soon as I think it is due to go back up again.
Apple (AAPL) - this stock was on a tear but has slowed down a bit recently. It is still a great company and I will buy more later. It also pays a dividend and is a safe stock as well.
Crowdstrike (CRWD) - I have been tracking this one for a while and finally pulled the trigger. It could be a long-term monster.
Zoom (ZM) - If I was a lot smarter, I would have bought a long time ago, but I was worried about seccurity issues. I probably got in at a bad price and may lose some money short-term, but this is supposed to be a good long-term bet as doctors are using more telemedicine.
Taiwan Semiconductor (TSM) - I have been tracking this one a long time and it has done well this year, going up almost 100%. I didn't realize it also paid out a nice dividend until recently, so I just got in.
Mutual Funds are another way to invest that is significantly safer. A mutual fund is a collection of stocks, so you don't have the ups and downs that individual stocks do. The problem is that when the market is rolling, you are getting lapped; and when the market is bad, you are still losing money. The ones I did own were TRBCX, PRDGX, and DFDMX. Also, once you buy a mutual fund, you can't sell it for like three months without paying a penalty, so your liquidity is very limited compared to stocks.
As a general rule, when investing, you want to look for companies to hold onto for the long-term. Sometimes you have to be patient with them, like Magnite, which did very little for quite a while and then exploded all of the sudden. It was the same great company all along, but people's perception changed as they finally realized it and that caused the stock to go up.
It is important to find companies you believe in enough to get you through the ups and downs. Ian Cassel said, "You can borrow someone's stock ideas but you can't borrow their conviction. Do the work." If you have any questions, leave a comment or hit me up on twitter, @BarryHoover.
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