This post is also available in: Spanish
Pura Rivera dabbles on the side as her own personal online investor and The Latino Connection Magazine has decided to ask our in-house financial hobbyist some questions as to how she got started.
TLC: Hey Pura, Can you give us a little background on what made you decide to invest online? What kind of financial background do you have?
Pura: So here is my official disclaimer, I am a complete novice. This is a hobby and interest of mine. I am not providing any sort of advice, this is just my simple story of how I decided to learn more about stocks and online investment. When I was a kid, I remember that my mom used to have me look at stocks in the newspaper, stocks like Disney and McDonald’s to track them for fun to see if they increased or reduced over a period of time. In the past couple of years, I decided that I was the only one I trusted to either increase my money, or lose it. I didn’t want to put my hard earned money in anyone else’s hands. Look what happened to all of those people who lost money in the Ponzi scheme. They trusted someone with their money and lost dearly.
TLC: How do you decide in which companies to invest?
Pura: I look at companies that are popular. Where do you and your friends shop? What has innovation? What is in the heart of America, something that we can’t live without like our Big Box stores. I listen to the news and online articles to see how specific businesses are doing. The ones that are having issues, I stay far away from those. I also look at what the millionaires like Warren Buffett invest in and what Jim Cramer says during his “Mad Money” shows on CNBC. Talk to your kids, find out what the hottest, greatest and latest things are. My 13 year old insisted that I purchase Disney shares and they are doing well.
TLC: What kind of software/hardware should an online investor have?
Pura: You can pick from many platforms. I personally picked www.etrade.com because it was easy for me to understand how to use it. It gives me updates about the companies I invest in, it provides me with articles on the specific stocks I have. I am also able to buy just 1 share if I want. You want to research how much a company will charge you to purchase and sell shares. A great comparison site is http://www.nasdaq.com/investing/online-brokers/ which features top online brokers.
TLC: What are the expectations of online investing? Can we get rich quick?
Pura: Absolutely not. I had a friend who was desperate to make some quick money, this isn’t the place for it. It’s a process of patience and vigilance. When Facebook went public and started offering stocks, I bought. A friend bought but panicked and sold very quickly because the stock wasn’t performing well and at one point was dropping drastically. However, I followed my intuition- I thought “everyone I know uses Facebook”. The stock tripled from what I paid for it. I had to be patient. This is a long term multi-year process. This is a marathon not a sprint.
TLC: What are the pitfalls/risks? We’ve heard people have lost all their savings. How can we protect ourselves from that happening?
Pura: First, before you look at stocks, make sure you have at least 8 months of money saved to cover living expenses to cover any unexpected emergencies or job loss. I also suggest that you invest in your retirement savings. When I have a couple of chavitos left over, I then decide to invest them. There is always risk involved. You will likely lose money. I have picked some duds and eventually sold them