Here is a quick update in week three of investing in stocks and crypto for the first time. For investment advice I got from my friends, read this.
My friend, Ian, has been training me to not have a panic meltdown every time my crypto plunges. Let’s just say investing is super addictive and DRAMATIC in a way I never thought possible. I’m officially hooked and scaring myself with this new obsession.
*Disclaimer: This is not financial advise.
Just for background, I like the idea of passive income (duh) and early retirement (current retirement plan is purchasing a large bottle of sleeping pills to top myself when I end up old and penniless, so there are only gains from here). Basically I want to make passive income off my savings, versus leaving it in the bank and I definitely need to figure out a retirement fund. My parents say I can fight over the $13 bucks they will leave me in their will. All ten of us kids will definitely be trying to get more then our fair ten dollar share…
So I took the advise of my friends and set aside half my savings for investment. Of that I put 60% in stocks and 30% in crypto currency with a 60/30 split between Bitcoin and Ethereum (those are the only crypto I have bought so far).
I started buying stocks using the WealthSimple Trade app, its Canadian so it makes sense for my needs. I can buy stocks and crypto on it (they only have BTC and ETH as cryptocurrencies available at the moment, so that is one drawback). The app has nice functionality, but the trading fees are a tad expensive. Buying/selling costs about $15 per $1000 trade. Also switching between USD and Canadian is expensive and the fees are around 1.5% per transaction.
I checked out Coinbase, ByBit, Binance apps for crypto buying as some people recommended them (and they have less fees %). I hated Coinbase and ByBit as too much security messing around and I KNOW I will lock myself out by forgetting my password so they were a hard “no”. Losing your crypto password is the Darwin award for the dumbest way to lose all your money, AND it has happened to people, even millionaires. Binance, I liked the layout and functionality a lot and kinda wanna start using it. Its out of Hong Kong. I just could not connect my bank account for some reason so I could not get it working, yet.
So ya, right now I am just using WealthSimple, its great, but I am probably paying too much in trading fees for the convenience of the lovely functionality. It also keeps track of your taxes, so for Canadians, this is a good starter app for sure. Also trades in Canadian currency have no service fees, so it benefits to buy/flip Canadian stocks.
I wanna get another app for crypto that has more crypto options as I would like buy Chainlink (LINK), Polkadot and DOGE, which my friends say are on the move in the right direction (ie you should have bought yesterday).
STOCK BUYING & SELLING LEARNINGS THUS FAR
So what stocks have I bought in the past three weeks? Now, I am not of the mind to keep them to myself as if you buy them, my stocks do better, so do invest if you like the portfolio I have put together for myself via trial and error.
I bought Apple, Aphria (medical cannabis), Alibaba, Bionano Genomics, China Green Agriculture, Clean Energy Fuels Corp, Canadian Solar, Facebook, Fuelcell Energy, Drone Delivery Canada Corp, GOGO, Blockchain Technologies EFT Class A, HIVE Blockchain Technologies, JD.com, KOPIN Corp, Lifeway Foods (makes probiotic foods and supplements), Photon Control Inc, Shopify (but I def wanna sell this ASAP), Tesla and Xebec.
I also got in on the Reddit “degenerates” GameStop fun and bought Nokia and AMC today just for an experiment. I also bought and flipped some Fossil Group stocks yesterday when they were randomly growing at 90%. I only kept one as I figured it would crash today, and I was correct, its down 37% today.
So what have I learned so far. One, I hate losing. Big surprise. Its very hard to think about long term growth when you are losing gains and in the red. I am pretty happy with 3 to 5% growth gains for stocks. I would say I am focused pretty much on the short term with the money I have invested so far. Xebec is a stock my brother was watching for 6 months and invested in November and its doubled. Xebec stocks are cheap and have been delivering great steady growth. Its my little “soldier” stock that keeps on giving and its already recovered from yesterdays crash and soldiering on. I have put more money on Xebec than any other stock. I also really like HIVE, Drone Delivery Canada (might be used for delivering covid vaccines to remote places), Biogenomics (BNGO) and FuelCell Energy. Kopin is also performing nicely — for inexpensive stocks.
I have sold all my stocks in CRISPR, Canada Goose, Trip.com, SunPower Corp, TransAlta Renewables, NVIDIA, Netflix, Neogenomics, Amazon, Baidu, Netease, ARKK, Algonqin Power, Abbvie, SEA, Sorrento Therapeatics, Vanguard Growth ETF, Taiwan Semiconductors and United Therapeutics. But I am still keeping on eye on them. I took a little loss on most of them. I will prob buy back Amazon (don’t judge me) as its 100% going to still make money, just maybe not great gains, but steady, I assume.
So far its been really fun. I tend to sell and make losses when I get sick of stocks not performing well. I am not good at waiting to cut my losses. I am still waiting for Shopify to break even so I can sell it. I tend to like stocks that are under $150 USD. Even if you are buying volume, subconsciously, you feel more in control than if you drop $3400 USD on ONE Amazon stock, versus buy 340 x $10 dollar stocks, on Xebec. One of the reason I hate my Shopify stock is because its $1500 USD. Now I did cough up for Tesla, but I am pretty happy with the returns and am confident that while Musk still lives, Tesla will grow in value. If he drops dead tomorrow, I would sell immediately, over his still-warm body.
Ok, my main problem now is riding it out. I start to panic when I see myself losing. It takes grit to hold when you know it will grow in future versus sell immediately to make the pain go away. The stock market did REALLY bad yesterday and I lost all gains and was in the hole 2% by the end of the day, I had lost biggest on stocks and my crypto was in the hole. It sucked and I felt like crap. Today the market has almost bounced back. I am still in the hole, but I can see that I won’t be probably by next week as the stocks I have chosen are good and the entire stock market took a hit yesterday with new policies being announced in the US and Covid, of course, and Tesla, Apple and Facebook having to declare their earnings and if they hit their targets or not.
My future plan is to take the other half of my savings and put in mutual funds, gold, or low risk ETF, so I can park it and hopefully get 1.5 to 3% on it. So mutual funds and index funds are another area of research I plan to do.
My sister, Tal, was getting concerned about my freakish stock and crypto obsession and said, “I bet there is a time of day, or day of the week that’s best to invest and then you can just be done for the day.” She looked it up and it turns out the best time to do investing is between 9:30am and 10:30am as that is the best gains time of day. We did not read anything about days of the week when people are more likely to take risks or anything like that though. So I am trying to stop trading by 11am and try to put my phone down and not spend all day watching the drama unfold. This I am promising to myself that I need to do, otherwise its going to fuck up all daily routines. This shit is addictive, so beware.
CRYPTO BUYING LEARNINGS
So I started buying stocks the first week and in week two I started with crypto. Ethereum is the most used (useful?) of the cryptocurrencies and its also very volatile (more so than Bitcoin), BUT with great exponential potential. I was warned to maybe invest 60% Bitcoin 40% Ethereum to get started. Also I was told to only throw at crypto what you are willing to lose and not be decimated (ie sleeping pills time). Its risky but there is (perhaps) a real science to it, as Ian insists. He’s been doing it awhile and has followed the data modeling of The Stock to Flow Model, including predictions and seen it pan out as predicted. Bitcoin is set to double in value by July, according to this model, so… its very tempting. And scary.
I get the excitement for crypto, its a whole new world. A decentralized global currency. Its rebellious. It IS very exciting. I could see myself putting a lot more investment focus in crypto in future. However, as a newbie, I don’t wanna be feeding a gambling addiction while I still am learning how to play cards, so to speak. I want to learn so much more and there are hundreds (?) of cryptocurrencies so a lot to learn and so much potential. I am learning the big difference between a “retrace” which is a short and quick drop in gains to a downward trend. I am currently panicking when I see a retrace, but it usually settles within a day or two and heads back in the right direction.
Thanks to everyone who has been helping me, especially my brother Ben and my lovely friend Ian, who is my key crypto guru and stock advisor with calming advice to not melt down and keep being “bullish.” Another pro tip from Ian is, “DO NOT buy crypto when after a few drinks” as you get really bullish and wake up the next day with, not only a hangover, but maybe some seriously stupid financial regrets.
For more pro tips, do check out my article (scroll down) on getting started in investing. There is perspectives and experiences from a number of friends I trust. I have learned everyone has their own style of investing, and you have to find the right thing that works for your level of willingness to take risks and how well you can handle anxiety and if you have the ability to hold and think long-term versus SELL, take a loss and then cry yourself to sleep. This being a grown up stuff is challenging.