Strategizing Your Starting Portfolio 

By: Eli Longman  |  May 23, 2021
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By Eli Longman

Investing into the stock market can be a tricky game, so the best question to ask yourself is “how can I learn to make money”? The stock market is truly a fascinating way to make money, but the biggest scare for most people is simply losing their cash. Some of the first steps to consider in the process of investing is to assess your own risk. When you think a company’s stock price can rise $10 in a month, you must consider that it can also fall $10 in a month, so then you ask “how do I know if it’s a good stock to invest in?” Well for starters, I started investing in April of 2020, right after the pandemic hit. Of course, like every other young investor in a bull market, I said to myself  “How hard can it be?” and before I know it, I’m taking loss after loss and thinking “What am I doing wrong?”

It was simply my strategy. I thought every stock’s price would soar after a ‘bullish rating’, but little did I realize the value of patience. I just knew a strategy was the missing piece. This realization brings me back to my original point of managing your own risk. As a starting investor, invest what you are willing to lose. Now that’s not to say that you should pick an egg out of the basket and hope it’s the shiniest one. In reality, you should find and understand the underlying fundamentals and technical analysis of that specific company you’re potentially interested in investing in. A company’s financial statements and historical data on the stock’s price can help you navigate the best time to buy. This is how I started to properly assess my risk and overall tolerance,  by strategically deciding between value stocks and growth stocks. 

Whether I think a stock is undervalued or has a bright future, I do my due diligence by properly researching and analyzing that company. Don’t get me wrong here, there were several moments in time where I said to myself “this is too hard” and “’I’m never gonna get this”, but I also remember reassuring myself  that “I am committed to learning about the stock market.” As long as I kept getting up and trying to do my best, I realized that eventually the hard work will pay off. 

Let’s say, for instance, you are down 5% in a day, or realized you shouldn’t have bought this stock at $40 because it’s now $30 or less in a matter of two days. These are all realistic scenarios that you may and likely will encounter, but you as the investor should set for yourself a gameplan with attainable goals and necessary precautions. Purchasing stocks, bonds, ETF’s, or Mutual Funds is just like purchasing products on Amazon. You want your money to go to something that’s going to give you value in return. I would also like to mention that as young college students, we are very fortunate to have access to all the information we need to properly buy any interesting stock we may come across. To bring this full circle, investing into the stock market is a tricky game and the wins won’t come easy. You must commit time to learn about the stock market, and assess your risk properly. 

Financial services like Robinhood have proven their dominance in popularity and the mobile-trading scene, even though fairness to the individual investor has been debated ever since the company had temporarily restricted trading for the global demand on chaotic stocks like AMC and Gamestop. Subsidiary Citadel LLC was shorting the Reddit hyped stocks Gamestop and AMC. Robinhood restricted traders on the platform from selling shares of Gamestop and AMC because one of their subsidiaries Citadel LLC was down billions of dollars from shorts they had on these two stocks. In the end, both parties won some and lost some, but the integrity and image of Robinhood has been questionable ever since. Meanwhile, the Apple App Store and Google Play Store offer a variety of mobile applications for investing to help ensure that you find  which app suits you the best. Also don’t forget to keep an eye on the cryptocurrency market because the shift to digital, blockchain-based, decentralized currencies have been stated as a potentially enormous new market of technology of the past decade. Now if that doesn’t float your boat then I don’t know what will. Invest with strategy, but also invest with enthusiasm, because having fun while investing allows you to succeed in  

Disclaimer: I am not a financial advisor or any individual recommending the purchase of any securities or investment methods. Please make sure to do proper research and speak to a licensed professional before investing any real cash into the Stock or Cryptocurrency markets. You are your own investor, good luck! 

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