Have Your Eye On A Company As A Prospective Investment? Here Are Some Steps To Consider.

steps to consider Picture Credit: Pixabay.com

Let’s say there is a brand, product, or service you absolutely love and find yourself using all the time. Or maybe is a product or service you may not necessarily love but find yourself spending a whole lot of money on consistently because you don’t have many alternatives. You start to consider the business behind the brand as a prospective investment and are wondering where to begin. Below are a few initial steps to consider.

Step #1: Find out if the company is public

If you are very new to investing, something you may or may not know is that not all companies are public or “publicly traded”. In simple terms, a publicly traded company is one that issues shares of stock to the public and allows people like you and me to buy a “piece” of the business. Unless a company is public, the average person is not able to buy shares in the business.

As a side note – the only people who can buy stock in a company that is not publicly traded are the founders, co-founders, private investors, angel investors, and such individuals that are offered pieces of the business before it ever becomes public.

Finding out whether a company is public or private for the purposes of stock investing is fairly easy. A simply Google search can do the trick. You can Google any of the following:

“Is [insert company name] a publicly traded company?”

“Is {insert company name] a public company?”

Immediately after you hit search, you’ll likely notice a flood of results which will either include stock charts and articles indicating that the stock is public – or – a series of headlines telling you the company is private. In the latter case, your research ends there. At least for now.

Now, let’s say you confirm that the company is public. The next step will be …

Step #2: Add the company to both, a virtual and written watch-list.

When starting your investing journey, it is super important (and very useful) to keep a list of businesses you may be interested in as prospective investments so that you can watch them week by week while doing your research on the side.

Keeping a watch list will also become very useful when you start putting together your own personal portfolio of investments. Sites like Google Finance or Yahoo! Finance have a “my portfolio” tab where you can add stocks you are watching.

In addition to adding companies to those virtual portfolios, I would also recommend keeping your own written record of the companies you are considering and writing down the reasons why a business(s) may have caught your attention, why you feel it may be a good investment, and your findings while doing research.

To be honest, some companies may require more research than others before you make any final investment decisions. However, keeping a virtual and/or clear written record of ALL prospective investments can be an incredibly valuable resource that can make it a lot easier to make decisions down the line. You can always go back to your original thought process or thesis for wanting to buy something and think about whether your original considerations were accurate or not.

I have my own excel spreadsheet where I keep track of information I consider important when investigating the companies on my watch-list. I’d be more than happy to share the template, let me know where to send it by clicking here.  

Also, if you come across any issues while trying to put together a virtual portfolio on yahoo! or Google, email me  – girlsonthemoney@gmail.com. 

Step #3: Officially start your research!

Your first official step in researching a stock you may be interested in is to locate the company’s Annual Report (also known as 10K) and start reading!

The 10K is completely free and available to the public. It is also fairly easy to find. All you need to do is go to the company’s official website and find the tab that says “Investors Relations”. Some companies keep Annual Reports under a link that says “SEC filings” while others will explicitly simply say ‘Annual Reports’. It may take a little bit of digging depending on the company.

To make things easier, you can also go back to Google and simply type in the following:

“[company name] annual reports”.

*Just make sure you look at the year of the report so you don’t waste your time reading something from 10 years ago. 

To give you an example of an annual report looks like, here is Apple’s (NASDAQ: AAPL) most recent annual report. All US-based companies use the same exact template when presenting their information so you’ll notice all 10Ks will look the same across the board.

The not so good news about annual reports is that they are quite long (about 100+ pages on average) and contain a lot of legal lingo and information that can confuse most of us.

The good news is that you don’t have to read the entire thing cover to cover. There are sections of the Annual Report that are more useful than others and provide a lot of valuable information you can use for your research. I personally focus my reading on a few main sections including the following: The “business profile” section, business plans and strategies (if available), risk factors, and selected financial data. I also like to look into management and see who is at the helm of the business, how long they’ve been working there, and their background.

Reading the 10K is the tip of the iceberg when it comes to investing research. I explain the entire process of analyzing a prospective investment in my Investing Boot-camp for beginners. However, the annual report is one of the most important pieces of your research puzzle and you should start there.

Step #4: Determine if the company can actually make you money!

Gather all your data, what you know about the business, and think hard about this one.

Let’s be honest. The reason we invest is to make money. Something important to understand is that not all companies that offer products or service you know and love will make you money. As I recently shared on my Twitter and Instagram page:

PICtinsta

For that reason, it is incredibly important to make educated decisions on whether or not something we are considering can actually be profitable. There are several important factors to consider.

If you’d like me to share a post regarding some of the steps I take to determine whether an investment can potentially be profitable, let me know! No one has a crystal ball or can guarantee exact returns for any company. However, there are factors that can help you make educated decisions on that and I’d be happy to share if you’d like to hear more.

Thank you for reading. If you enjoyed the post please share it with friends, family, and loved ones and let me know below if you have any questions or comments. Also, don’t forget to sign up here if you’d like to check out  the template I use to keep track of my watch list stocks.

Have an amazing weekend! Happy mothers day to all the mothers in the Girl$ on The Money community <3.

Cheers to profits,

Mabelle

PS: Did you knowyou can check out ALL the newsletters from 2016 in our exclusive eBook.  If you are looking for our Amazon bestseller for investing beginners, Click here.  

Risks of Individual Stock Investing: Here Is What You Should Know

RISK

I recently read a book (not to be named) where they mentioned that investing in individual stocks is a big mistake. The book started out great with some solid personal finance advice but when I got to the chapter about investing I was a bit turned off.

As someone that is passionate about stock investing and that has been investing for almost a decade I obviously disagree with the idea of staying away from stocks. I do agree that stock investing is risky when you don’t know what you are doing. Hence, is not something you can just jump into.

To be honest, this is not the first time I see these kinds of discouraging statements in a book and it makes me sad. Why? because I’ve seen first hand how investing in high quality, growing, thriving corporations can grow personal wealth faster than anything else I’ve ever seen.

With that said, I want to just put it out there that there are in fact risks attached to individual stock investing but there are also great rewards.

Here is what you should know:

(1) When you buy an individual stock you are buying part ownership of a company. This means that the return on your investment will be highly correlated to the performance of that company. When you buy a piece of a business you are entrusting management to do everything in their power to make the company great and make sure your investment grows over time. You also go in with the agreement that there are no guarantees.

(2) Bad things can happen to great companies at any time. Companies go out of business, get disrupted by technology, lose their competitive advantage, and the list goes on.  One way to protect your portfolio from crashing when a single company is doing badly is to make sure you strategically diversify the investments you own and make a conscious effort to make sure you are choosing companies of quality. It is VERY dangerous to invest in random businesses you don’t understand much about or are not sure how they even make money. Always do your own homework.

(3) The market is unpredictable and volatile – One thing you need to understand before you get into stock investing is that the market can be very volatile and unpredictable. It can go up or down at any time for any reason. You have to be able to put up with these kinds of ‘mood swings’. The money you put aside to invest should be part of your disposable income – extra money you may have and that you won’t need for a while – at least the next 3-5 years. Money that you need for your emergency fund, your mortgage, your rent, your car payments, your high school senior’s education, anything immediate should not be in the stock market.

(4) Historically, the market has gone through serious crashes. You have to understand that those things happen but you also have to understand how to remain calm and remember that panicking is not an investing strategy. Here are some market crashes that come to mind: Market crash of 1929, Black Monday (1987), the Dot Com Bubble of 2000, Housing Market Collapse of 2008. I personally lived through the market crash of 2008 and my love for investing remained intact.

(5) If you invest blindly in anything that you don’t understand simply because of other people’s recommendations or simply because you think someone gave you a “hot stock tip” you dramatically increase the risk of losing your money very rapidly. Understand that investing is not playing the lottery. You MUST take the time to educate yourself and this is something I will strive to help you with through the content I share.

In conclusion, investing is an incredible way to build wealth but you have to learn to make educated decisions and understand that not all companies make great investments.

There is a reason why interest rates on savings accounts are 0.001% – because there is zero risk involved. If you put $1000 in your bank today, you will likely see the same $1000 two years from now.  The stock market does not offer those kinds of guarantees but it does present you with the opportunity to grow your wealth significantly and faster over time if you do things the right way.  

Yes, stock investing is risky but things that have the potential to offer great rewards usually are.

Questions? Comments? Wish to discuss further? Comment below!

Cheers to profits!

Mabelle

 

What is Earnings Season?

es

Earnings season comes around once a quarter (four times per year) and is the time when most (not all) publicly traded companies report earnings. A publicly traded company is a company that sells stocks to the public.

During earnings season, regulated public companies are required by SEC law* to submit a summary of how the company is doing – specifically how it performed over the past 3 months. Think of it as a ‘report card’ where companies share important financial information and make comparisons to prior quarters and years. They also provide updates on any current or future business plans.

Earnings reports allow existing and prospective investors to examine for themselves how a business is doing.

Earnings calls and reports are free and readily available to the public. That means that anyone can listen in live and/or have access to the full transcript of what was said once the call is over.

Interested in checking out the earnings of a stock on your radar? Is easy!

(1) Go to the official website of the company you are interested in and search for the “Investors’ Relations” tab.

(2) Within Investors Relations – search for a tab/link that says “Press Releases” or “Quarterly Earnings.”

(3) Once in that section look for the most recent quarterly earnings.

And that’s all folks! Questions? Comments? Something wasn’t clear? Let me know in the comments.

*The SEC is the entity of the government that regulates public companies. You can check out compliance requirements here.

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Still a bit confused? No worries! One of the MANY things I teach in the Stock Investing Bootcamp for Beginners is how to read and understand quarterly reports. I teach you what to look for, what the terminology means, and how to use the information for your research. To join the waiting list for the upcoming course, click here!

My Investing Story and Birth of Girl$ on The Money

Hello, everyone!!

Welcome to the first official post of my GOTM blog. I have been trying to work on this blog for a while now stressing myself out about a million and one details. I recently came to the conclusion that things will never be 100 perfect and decide to just do it. 

mlk

I’ve been trying to decide on a first post and then realized what better story than to share how I discovered investing and a bit about how Girl$ on The Money was born.

Here we go …

I discovered the stock market for the very first time during my senior year as an undergraduate student. I attended the State University of New York at Albany (SUNY-Albany) with the intention of becoming a Computer Science major. My “dreams” were crushed soon after I enrolled in Computer Science 101 and realized I was completely lost and confused. Even after getting a tutor I still found the subject extremely hard.

Prior to college, I attended public schools in Bronx, NY and had never taken a computer science course in my life. However, I loved the idea of technology and wanted to “be part” of this “new world” (think 2001 or so). I also graduated salutatorian from my high school and had a lot of confidence in my ‘smarts’ and the idea that I would be able to just “get it”. Guess what, that wasn’t happening.

I was discouraged for a while and discussed this with my college counselor. I had no idea what to do next. He suggested I look into the business school and consider majoring in Business instead. At first, I was skeptical but then it kind of started to make sense. I grew up with a father who had a very successful business for YEARS (he still does!). I also loved math and numbers and all that good stuff and business actually started to sound interesting. I figured, OK sure! And so, I slowly started adding business courses to my schedule. 

In the fall of 2004 I enrolled in a class that completely changed my life  “Investment Management” by professor Christopher Faugere (still clearly remember his name and the class). As someone that had NEVER been exposed to the world of investing in any way, shape, or form; I found the course extremely fascinating and was completely hooked from the beginning. The core of the class was to learn the general concepts of investing and how to analyze publicly traded companies. Our project for the semester was to apply everything we had been learning into building a virtual stock portfolio.

While my team and I didn’t win the contest of the most ‘profitable portfolio’ we did get a 92% on our paper and I won something far more valuable – I found a passion. I immediately switched my concentration to finance. 

finance

The actual report that I’ve saved for well over a decade!

In May of 2005, I graduated with my Bachelor of Science in Finance and went on to work a corporate job in the insurance industry. Although my real dream was to work in Wall Street for a major investment bank, the reality was that I had zero connections in the Wall Street ‘world’ and as a minority (Latina) and also a female I was not very well represented in the finance world (we still aren’t). I was afraid I would graduate jobless and disappoint my parents. And, so, I decided to go with the insurance job.

All I could think about day in and day out was how I could start investing and asking the “universe” to send me someone that could explain this to me. Notice that even with an “official” degree I was still clueless and confused about the actual process of investing.(Side note: this is why I love teaching my investing class because I get to show my students exactly how this works).

I was eager to learn and so I would read everything I could find on the subject. I would say I was borderline obsessed and I may or may not still be the same today =). 

It took 3 years for me to finally meet someone that taught me the actual process of investing. As my higher power, luck, or the universe would have it, this person was a new hire at the insurance company where I worked. The crazy thing is that they could have sat this person anywhere in that office but they sat him right next to me and we got to talking.

When The Student Is Ready The Teacher Appears.

Talking about stocks to anyone who would listen is something I had been doing for YEARS so naturally the conversation came up. Most of the time I would be greeted with blank stares and confusion. However (and thankfully) this time was different. To my pleasant surprise, this person shared they had been investing for a while and dedicated the following weeks to teaching me everything he knew about investing.

I would be forever thankful to that person (Alimo). If it wasn’t because he “magically appeared” in my life perhaps I would have never gotten started or would have gotten started much later in life. I also know there are no coincidences in life and I took that ‘serendipitous’ meeting as a gift from God/my higher power.

Finally, in the summer of 2008, a few months shy from the financial crisis that shook the world, I opened my very first online brokerage account with Tradeking and a few days later I bought 4 shares of stock from my favorite company – Google. I remember the day clearly and I was so excited I think I almost cried. As you could probably tell by the fact I only purchased 4 shares, I was still a little bit “hesitant” and working on getting the hang of it. I was so excited to go through the actual process and to just learn hands-on how to complete an investing transaction from beginning to end.

As the financial crisis got crazier and major corporations started going out of business I was not discouraged at all. Instead, I remember being super excited and started to buy shares of high-quality companies at deep discounts. I think this only served to strengthen my love for investing and I continued educating myself on the subject.

As time went by and my passion for investing continued growing, I decided to pursue an MBA in Finance and Entrepreneurship which I finished with honors in the spring of 2014. I learned a ton in those business classes mostly fancy finance formulas and how to be strategic about business practices. I also learned that no one needs an MBA degree or a finance degree to understand investing and be successful at it.

Once I finished my MBA degree I was faced with the decision of pursuing my life long dream of a Wall Street job. However, as the universe would have it (again!) a semester before I graduated with my masters I got the idea for Girl$ on The Money while sitting at a cubicle at my corporate job. 

In the spring of 2014 after finishing my MBA I finally quit my job in insurance and decided to pursue my dream of Investing Education for the masses. Despite wanting a “Wall Street Job” so bad for many years, when I got the idea for Girl$ on The Money things started to make a whole lot of sense.

I soon realized that maybe my mission in life is not working in Wall Street making the wealthy wealthier. My mission is to spread the knowledge of investing education to everyone who will listen and show (in a practical hands-on way) that investing is NOT rocket science and that anyone has the power to invest and be successful at it. 

Today I manage a profitable portfolio of various stocks most of which I’ve held for several years. One of the reasons why I feel so strongly about investing and spreading the knowledge of investing education is because I have seen first hand the incredible difference between seeing your money grow in an investing account VS. seeing your money make pennies on the dollar every year in a regular bank account.

If you educate yourself and make educated investing decisions (which is what I strive to teach with my content and everything I share) you can grow your wealth a lot faster and be exposed to a world that many of us are not exposed to – sometimes ever! Through Girl$ on The Money, I am here to change that.

you dont need

 

In this blog, I will continue sharing valuable content about investing for beginners so please feel free to spread the word and share it with your family, friends, and loved ones. 

To the right-hand side of the page, you will find a box where you can add your email and be notified when a new post is up. You can also join our mailing list to stay in the loop of all content and follow us on social media: Instagram, Facebook, Twitter.

Cheers to profits!
Mabelle

 

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Courses & Resources:

Stock Investing BootcampClick here for details of our Best Seller 5-week Stock Investing Bootcamp for beginners.

Understanding Your Investing Options: Starter Guide for Beginner Investors: New to investing and not sure where or how to begin?! This guide is for you! Check out details here.

 

 

New content on the way!

A fresh new season of Girl$ on The Money blog posts starts this Saturday 4/22! Make sure to connect to all of our social media channels (see our welcome page) and subscribe to the blog (box on the right) to stay in the loop of ALL new content.

Cheers to profits!

Love,

Mabelle Nunez, MBA

CEO & Founder Girl$ on The Money

Books & Resources:

Interested in checking out our most informative and popular newsletters from 2016 conveniently organized by chapter in eBook form? Click here. If you are looking for our Amazon Best Seller for beginner investors, check it out here.

 

 

 

Your emergency fund should not be in the stock market! …and here is why.

This blog post was adapted from the 88th edition of our newsletter. To sign up for the distribution list and never miss an issue, click here. 

Hello, everyone!

 

Today’s topic is one that many people have asked me over the years — “is it okay to put emergency money in the stock market?”. The short answer is absolutely not. The long answer is below. 
As the name indicates, the money you allocate to an emergency fund is to be used for emergencies. As we all know, emergencies never give us a “warning” or a “heads up” in regards to when they are coming, they simply show up unannounced and uninvited.
 
For this reason, the money you may need for those “unexpected life occurrences” must be kept as liquid as possible. By liquid, I mean the money should be easily accessible in its entirety when it is needed.
Some examples of liquid accounts include:

(1) High yielding savings account (a savings account with a high-interest rate)
(2) Money market account
(3) A CD (certificate of deposit)

 

The point is having those funds at a secured placed where there are easily accessible and where you’ll be able to take the money out without any issues or complications.

 

“Money from an emergency fund or any money you may need in the short term (within the next six months or even the next few years) should not be in the stock market.”

The reason why the stock market can provide us with amazing returns over time is because it also involves risk.

There are no guarantees in terms of how much money you will make (or how much you can lose) within a certain time period.

You don’t want to find yourself in a position where you need the money as soon as possible and have to cash out of your stocks at a loss. That is not the way to invest and much less build a profitable portfolio over time.

Although it is true that money in a bank doesn’t grow at all (returns are usually pennies on the dollar) The advantage of having that emergency money in a bank account is that at least you’ll be rest assured that 100% of your money will be there when you need it.

In my opinion, banks are only good for one thing and that is to “hold” your money and keep it safe. So, use it for that and then try to allocate the rest of your funds (that you won’t need for several years) in high-quality investments.

 
In conclusion, keep your saving and investing money separate. You will have peace of mind and will be able to let your investing money grow and compound over time as opposed to being worried that you may need it soon.
Questions? Comments? Would like to discuss this topic further? Simply comment below or email me: hello@girlsonthemoney.com
 
Cheers to profits!
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Courses & Resources:
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Looking for best seller books on investing? Check out our Amazon Best Sellers – here and here. Note: Books are included when you enroll in the Bootcamp.

Foundations of Wealth 101: Ways To Improve Your Credit Score

Hello everyone! I am here switching it up a bit with a non-investing-related post inspired by an email I received from a member of the Girl$ on The Money community in regards to her credit/FICO score.

I read an incredible article in the Wall Street Journal some time ago in reference to this same exact question. I learned so much from that article and felt the information should be shared.

Here is the question that was received:

One of my resolutions for this coming year is to have healthier finances, starting with my credit score. Can you provide any tips on how I can go about doing this?

Before I get into this question, I believe it would be valuable and interesting to start by sharing some of the cool stats in the WSJ article.

How are other people doing?

If you were ever curious about the FICO score of a various individual in the U.S here is a quick rundown:

Population                                                Credit Score
32.8 million people                                     700-749
36.4 million people.                                    750-799
38.6 million people.                                    800-850
2 million people*                                        Perfect 850

*Only about 1% of the population has a perfect score of 850

What is your FICO score composed of?

photo (17)

Ways to get your FICO score:

1. Via any of the three major credit reporting agencies: Experian, Equifax, Transunion. Costs can range anywhere from $14.95 to $21.95. Keep in mind that these agencies may be getting information from different sources so the final scores may differ slightly. If you see huge discrepancies, may be a good idea to look closely at the credit reports for incorrect information.

2. Lenders such as Citigroup will start showing FICO scores to customers with citi branded cars. Similar lenders such as Discover Financial Service and Barclays cards already offer this service free of charge. Check with your respective credit card companies to find out if they plan to offer this.

Word to the Wise: Beware of firms who constantly run ads on TV or online offering a “free credit score”. There may be a huge discrepancy between your official FICO score and the scores these “free” online firms offer.

Often times they offer a free score in exchange for your personal information which they can then turn around and sell to advertisers. A good rule of thumb to do your research before you provide any information to anyone. Especially via the Internet. And especially for a free service.

Quick and Practical ways to boost your credit score:

1. Spend less on your credit cards and make an attempt to pay off your card balance before the statement closing date. According to the WSJ article:

“…paying your credit card bill in full when the statement arrives isn’t good enough if you want to keep your debt-to-limit ratio low, as the balances on your credit reports at Equifax, Experian, TransUnion are based on the most recent month’s credit card statement….one trick is to pay the lender soon after you use the credit card, well before the statement closing date”.

2. Even if you have multiple cards, try not to use no more than two credit cards at the time. Choose the two cards that have the highest spending limits. Stay away from store-branded credit cards (target, gap, etc.) which tend to have lower spending limits.

3. For a FICO score of 800 or more, look to have a debt to limit ratio of no more than 10%. Example: if your combined credit limit on all your credit cards is $20,000; try to use no more than $2,000 at any one time.

4. If your credit card company calls you offering a credit increase or if you contact them; ask whether they will be running your credit before granting the increase. If they do, that may have an effect on your score as well. You may want to pass on this one.

5. Although is good when your lenders increase your limits, refrain yourself from using the extra credit if your goal is to improve your credit score.

6. If you have multiple cards, focus on two of them (as previously noted), but try to use the other cards at least once a year. Some credit card companies may close your account if they don’t see any activity. Depending on how long you’ve had that particular card, a closing of that line of credit may hurt your score.

Things to keep in mind for the long term:

1. Information about a successful pay off of car loans and/or a mortgage may stay on your credit report for about 10 years.

2. However, information about missing a payment or defaulting on a loan may show on your credit report for up to 7 years.

3. If you are currently looking for best interest rates on your mortgages, car loans, student loans; try to complete all inquiries within a 30 day period. Inquiries aren’t factored into your FICO score within the first 30 days on file and are treated as one inquiry if they occur within a 45-day window. More spread out hits may begin to take an effect on your score.

Hope this information was valuable to you. I personally learned new facts as I researched information for this post which I will be applying to my own financial life.

And finally… if you are looking for a Facebook group that focuses entirely on credit and credit score questions and resources, check out The Creditnista’s – Netiva Heard “Credit Makes Sense: Prosperity Partners”. She’s awesome and extremely knowledgeable on this specific topic! Tell her Girl$ on The Money sent you :). *Note: This is not sponsored in any way. Netiva is truly awesome. Had to mention her in this article. 

TELL ME: Do you know your current FICO score? What was the most valuable tip to YOU in this article?

Wishing you Health, Love, Success, and Profits!

-Mabel

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Already have your savings and credit on track and are ready to graduate into investingJoin the waiting list for the next edition of the Stock Market Investing Bootcamp for Beginners!