⬇️Missing that high ⬇️
|Nov 5, 2019|
Welcome to Better Have My Money, my Monday night newsletter about stocks, investing and figuring out how to get rich without being an asshole.
So I don’t usually read finance news, but there’s a lot of chatter about how how The Dow, Nasdaq and the S&P 500, aka basically the indexes which are thought to display the health of the overall market, hit record highs today.
Confusing term of the week: "Dow", "Dow Jones" etc — one of those obvious ones that we all pretend to know but can't actually define, the Dow Jones Industrial Average refers to an index of 30 major blue-chip stocks that is often used as an indicator for the market itself. Yes, the Dow is just the average of 30 major companies from a mix of different industries. It's price-weighted, so the more expensive stocks make up a bigger portion.
Some companies that make up the Dow: Nike, Walgreens, Apple, Disney, Visa, Coca-Cola. Some companies not in the Dow: Amazon, Facebook, Twitter, Google, Netflix.
Except, when I check my Robinhood and Ally Invest account, I… do not see it. In fact my portfolio was down nearly 1% today. And in the last three months, things have been heading downhill, fast.
One small example, iRobot (IRBT), aka the makers of Roombas, was up nearly 50% in July, when I did my last stocks check in, from when I had first purchased it in Feb 2018. Now, it’s -19% from when I first purchased. A huge loss!
Back in July I wrote: “My money is up 55% overall since last February, which is honestly bonkers.”
Well don’t worry, things are now… less bonkers. Here’s a look at my lil portfolio:
I’m still up 22% overall since I started investing, but I wanted to examine why I’m not feeling the highest-of-highs that the rest of the market is currently.
And it’s because I choose to invest in a company’s individual stocks — rather than index funds or ETFs, which minimize the risk by giving you a tiny bit of lots of companies and therefore you just ride the gradual wave of the market rather than feeling the highest of highs and the lowest of lows from a particular company.
I’ve said before that index funds are the best, safest and most reliable way to invest long term, even if I don’t really invest that way. (I do have $1500 in index funds thanks to my Acorns account! Collected over a year thanks to the app just rounding up my purchases to the nearest dollar. If you sign up to Acorns, use my sign up code to join and we both get $5.)
But they aren’t my main investing interest. My annoyance with them is twofold. The biggest: I don’t always want to make money off a lot of these companies because they’re destroying the environment, society, etc.
Second, if you have index funds there is nothing to do. Nothing to monitor or learn from or realize when your get-rich-quick scheme is failing (or working!). It’s boring. You just… sit and wait. (To be clear, this is good and exactly what someone should want in investing, I am just difficult and only care cause there’s an adrenalin rush in individual stocks and this makes me a moron).
I’ve spoken before how often “ethical” funds aren’t so much ethical as not the worst of the worst. No major oil companies but like, yes it will still include social media companies that encourage white supremacy, companies that use dodgy labor practices to enjoy its packages get developed in two days, etc.
Good time to note that rather than suggesting a charity to donate to this week, instead please vote in local elections tomorrow!
But, I acknowledge I probably need to scout out some non-dodgy ethical and sustainable ETFs to round out my portfolio and make things a little less rollercoaster. If you’ve got any suggestions, let me know!
Although to be clear, I’m still up 22% up overall and the S&P 500 is up 13% from Feb 2018, when I started investing, so…
May you also be an investing genius,
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As always, if you've got any questions about stocks, this is a shame free zone. Just reply and ask away.