Brief explanation of what we are doing?
We are going to do a number of things here:
1. Invest ~$110 dollars up front, then $25/ week
2. Monitor how our portfolio grows
3. Compare the growth of these investments to other portfolios
4. Learn from the experience
Goals of this case study
We are trying to get data to show people how the stock market works, and to prove whether or not it’s a good idea to invest in company just based on an average knowledge base.
Not everyone is a financial advisor, but everyone has access to the stock market, so it seems responsible to test and see what kind of returns real people can expect to get from the stock market, or if passive investing is the way to go.
Or maybe neither approach is best, but let’s find out.
With this portfolio we are having fun and doing some emotional investing.
We started off kind of boring by buying some Tesla and Coke shares, but now we are branching off into other things a little bit to see if we can find some good stocks, preferably without losing all of our money…
Summary of Week 1, Month 2
This month is the first full month of our case study, so I’m excited to see what happens!
Here’s what our emotional investing case study portfolio is starting to look like now.
I made a few changes this week, because I can’t really have any fun with the passive investing portfolio and wanted to make things a little more interesting than just buying KO and TSLA.
I ended up selling $25 worth of TSLA for a very slight profit, and bought $10 in Amazon (AMZN) and $15 in Waste Management (WM).
With the regular $25 I deposit weekly I purchased $10 of Boeing (BA) and $15 more in Coca-Cola (KO)
Summary of Week 2, Month 2
This week, we invested $25 into AAPL, because it’s Apple… so why not, right?
Apple is splitting soon, so I’d like to experience that process and see what happens.
I hardly doubt Apple is going bankrupt any time soon, so I don’t mind “risking” my $25 on it.
Uh oh, we lost $.07! HURRY SELL!!!
While I’m not very proud of only being able to buy .056 shares, at least I now own a part of Apple!
Here’s what our emotional investing portfolio is looking like now:
Summary of Week 3, Month 2
My girlfriend has been bugging me about wanting a share of Disney stock, so this week I invested $15 into Disney, and $9.26 into Apple.
For some reason, M1 Finance only decided to buy $24.26 worth of stocks in our passive investing case study this week, so I invested the same amount over here, yay for fractional shares!
I figure I can’t go wrong with Apple stock, so why not.
Summary of Week 4, Month 2
This week, I decided to invest in some positions that were doing well for me, as well as a little bit more into Disney.
My Girlfriend wanted a FULL share of Disney, but I didn’t want to buy it all at once, so I’m going to buy it a little at a time thanks to fractional shares.
Apple has been doing well so I figured I’d invest a little more there, and Bank of America has been outperforming my position in JPMorgan Chase, so I wanted to put some more into that as well.
Thoughts and reflections for moving forward
Emotional investing is really addictive, but I could see the potential for getting sucked in and losing a lot of money.
You’d think a lot of companies would constantly make money and stock prices would climb steadily, but that’s not how it is in reality, apparently.
I think as long as I stick with strong companies I’ll be fine, and my investments should be fairly safe.
I’m trying to diversify a bit, and hopefully I can get some cheap stocks and make a little money.
I thought that investing in specific companies would be a lot more volatile than it has been, so hopefully things keep going the way they have been with steady returns.
I’ve been thinking about it and I wanted to try to invest more into companies that are doing well for me rather than averaging down into positions in weak companies.