Friday, February 5, 2021

Stock Ruckus Turned Me On to Investing

I finally find the stock market compelling, and all it took was a revolt against Wall Street.

Mentions of a tremor in the stock market pierced my Twitter feed here and there in late January, but I paid little mind. I understand the stock market about as much as I understand the appeal of heist movies – both baffle things me, but at least with the films I can follow the action and once in a blue moon enjoy it. I couldn't say the same of the stock market.

Then a Facebook friend shared a post explaining what the hell was going on with GameStop stock and the Reddit group wallstreetbets. (This post on Tales from the Geek gives an easy-to-follow rundown of what a short is and how Redditors took action when someone noticed that a hedge fund had dived deep into short trades against GameStop, making the stock ripe for a short squeeze, also explaining what the hell a short squeeze is.)

That post flipped a switch for me. I didn't have a full view of the sky, but just enough light of understanding was shining through the leaves to snare my interest in the stock showdown unfolding before the world. Regular people were sticking it to the mega-rich who usually stick it to us (and always seem to get away with it). It was glorious. (It was also short-lived, but that's not surprising. The main thing I took from watching The Big Short was how banks and other uber-rich finance types can cheat and change the rules and get away with it.)

Dancing with the market without knowing the steps

Suddenly the stock market was exciting. Every article I read about the short squeeze in play forced me to Google yet another new term. Finance is a special language I can't speak. But the buzz about GME stock filling my Twitter feed excited me enough to start learning. (Terms included market jargon as well as internet lingo, like the fun-to-say "stonks.") It also made me keen to buy a few stocks. Which in turn motivated me to read up on the market, crashing into murky new terms every few minutes, sending me down new rabbit holes.

I didn't even know how or where to buy stocks. My husband handles our retirement funds because I never understood investing and didn't care to learn. Most of my single life, my idea of saving for retirement was keeping money in a savings account. I was one step from stuffing it all in a cookie jar. I never figured I'd be able to retire, anyway. At some point a banker told me I wasn't earning enough interest to cover inflation, which was my first realization that saving for the future should include some kind of retirement plan or investment other than a bank account. 

My only defense for this is that I grew up poor and most of my adult life up to that point I'd earned too little to put back for retirement. That conversation with the banker was shortly after I'd finally begun to earn enough money to think about retirement funds, anyway. I put some money into a fund with Fidelity, but still had little grasp of investing. Soon after this I met my future husband, who has followed the stock market and finance since childhood. He enjoys figuring out where to invest, so I gladly let him take the reins.

The GameStop frenzy shook me awake. My husband, thrilled that I finally took an interest in the stock market, showed me how to buy and sell through Vanguard. I saw a brokerage account among our assets that showed a little over $500 available to trade or withdraw. He told me to have at it and use it to fund my buys as I learned about investing.

How the stock market stood in for my weekend in Vegas

I looked at my foray into stocks as a weekend in Vegas. I've wanted to go to Vegas for years, just to have a wander more than to gamble, but time/cost/health issues always derailed it. I'm cautious with money, so I'd probably limit myself to losing around $100 or so if I ever hit the gaming tables – and that's the amount for an entire weekend, not one "crazy" night. Since I was only willing to gamble on stocks with an amount I'd be willing to lose, I aimed at about $100 in buys.

I ended up going slightly over the $100, buying shares in AMC and Nokia. The GameStop stock was too rich for my blood when I dived into the market last Friday (January 29). My picks came from stocks mentioned in articles about what might next get a boost from wallstreetbets investors.

Adult education (in investing) and hitting my real goal

The main thing I've learned so far is the best way to predict which stocks will drop in price, which turns out is simply for me to buy a share. My AMC stock sunk like a stone after a brief rise initially, while Nokia gently drifted down a little. The second lesson was no matter the hype, no matter how many people swear a stock is "going to the moon," I should keep my feet on the ground and proceed with a clear head. Which is what I did, but I'll tell ya, there were moments I felt tempted to buy more AMC and get a little GME when it was at around $300 despite the much higher cost compared to my other buys. Some people on Reddit proclaimed GameStop stock would to $1,000, maybe $10,000! Heady talk, but the stakes were too high for me, especially since I had no idea how likely those numbers were. Even if those stocks skyrocketed, I knew I'd be better off staying with my little hand holding only a few shares of less-exciting stock. I have no idea what the hell I'm doing, and I know myself – sticking to an amount I'm willing to lose is better for me mentally than taking a bigger risk. I spent too much of my life being poor to take a real gamble with my finances.

I will never be the person that drops $10-$20K on a stock in hopes of a huge return. I don't know enough to try, and even experts lose big all the time. What I'm working toward is becoming a person with a better basic understanding of the stock market and investing, and the GameStop craze inspired me to take the first step.

I've got a long way to go. My first stock buys didn't double or quadruple or skyrocket beyond my dreams, as many hoped for (and a few achieved) recently. That was before GME tanked this week, and many had big losses on paper, at least. But if they haven't sold yet, who knows? Maybe the stock could rally? Not looking good, but I don't know jack. 

However, dipping my toes in the stock market gave me what I actually wanted: a spark to fire my imagination and awaken a passion to learn more. I'm keeping my AMC and Nokia shares for now, and I'll continue slowly figuring out how the hell the stock market works.

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