How I Figure Out What Stocks to Buy

One of my goals for 2020 was to constantly invest my money into the stock market. I wanted to learn how to invest correctly without having paying anyone or a service to do it. After much trial and error I have figured out what works best for me and want to share it with all of you, spreading the wealth per say.

I use fidelity for my Roth IRA, I have always invested in my 401K at work, but I wanted something that I made the decisions on what stocks I want. I also wanted an option where when it’s ready to retire, I don’t have to pay taxes on my money. I don’t have a crystal ball that tells me how much taxes are going to be in 2055, but I can tell you they will be higher than what I am paying now.

Every pay period I put in 2% of my paycheck, once my consumer debt and student loans are gone that will be bumped up to 20%, then once my house is paid off that will only be bumped up to 50% of my income. I deposit a check every other Friday morning and have my research of different stocks done the two days before hand. Because you can only purchase stocks when the stock market is open and I want to get in as soon as I can. With Fidelity there is no charge for purchasing a stock or stocks like other companies and there is no fees involved either.

How I Choose my Stocks

I have been an observer my entire life, so this is when it benefits me. Since I live alone and own my own house, I have to go out and do the grocery and household products shopping. When I go shopping I try to stick to the best deals, but that doesn’t mean that I’m eyeing other people’s carts, I am also looking at what products are more empty on the shelf. I make a mental note of new brands, or what products were purchased more, then I go home and research their stock. I look at the over all history, the price, and financial articles about the product. For example, every time I go shopping I see that Tide is always being purchased. Tide is a brand of Proctor & Gamble. When you look up their history you can see that the price of the stock has grown over the years, yes it has been up and down in the late 2000’s but the US went through a financial crisis at that time as well.

Now, being Hispanic I think “What brands that we use have grown in the market?" Well, I know most of my Tía’s and my mom uses Fabulouso. So let’s look into Colgate-Palmolive’s stock. Let’s say for example my mother heard about this new product called Fabulouso launching in Venezuela in 1980 and then bought 100 stocks at $0.87 each, if she would have held onto it today that same investment would be worth $72.37 each, which would be a total of $7,237.00. So she could have turned $87 into $7,237 from investing her money and holding on to that stock, basically making that money work for her. There is no surprise that the Hispanic/Latino population has large buying power in the US. So look into things that we usually have in our homes for ideas of what stocks to buy. Believe it or not, women have the highest buying power, yet as women we are known to invest less. Ladies, we have to change that!

Macrotrends.net

Some of you may laugh, but I use social media too for ideas. The way I look at is that, I see you on your Instagram with that bottle of Hennessy and a new Chevy Impala, so I look into investing in those two companies. Then I see another person that is posting her $300 makeup haul receipt on Snapchat, then I research that stock too and put it on my wish list. I see that a newly-wed couple from my childhood just posted on Facebook that they just bought a house, I know what they do for work and there is a slim chance they paid that house in cash. So, I look into investing in a mortgage company. Why should those company be the only ones reaping the benefit of your peers spending? I know I want a piece of the pie too!

If you are like myself and want to choose some stocks that make a difference in the world, do your due diligence and do research. Let's say you want people of color to get ahead, find companies who have minorities on the board or a colered person found the comapany. Or let's say you are concerned with global warming and the environment, invest in companies that are making strides for "Going Green". Put your money where you want to see the change, at the end of the day money talks in a number of different ways.  

If you don’t feel comfortable picking a specific company, you can always purchase an index fund. An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial market index. So instead of just investing in one stock, this will give you the option of investing in a handful with just purchasing one. Many investment advisors have said that this is the best way to go. 

Listen to Podcasts

There are so many podcasts that give great suggestions on how to invest in the stock market successfully. These hosts hire authors of financial books, Ivy League financial professors, and successful financial advisors to speak out on how to invest correctly. These are some of my favorite financial podcasts:

• The Clever Girls Know Podcast
• Yo Quiero Dinero: A Personal Finance Podcast
• Brown Ambition 
• The Rachel Cruze Show
• Life Kit: Money by NPR
• The Chris Hogan Show

I hope this post has helped you take the next steps to investing in the stock market. This could be another form of income you can add or another way to invest in your retirement. So before buying something that gives a short term satisfaction, think about investing in your future. Don't be scared on not knowing what you are doing, you will get the hang of it with time. Future you will thank for taking that leap of faith and making a change with your finances.

Con Amor,

Adriana