My First "Real" Investment Experience

My First "Real" Investment Experience

Usually Mondays here at MomVesting are reserved for financial definitions, but I have been meaning to share my first foray into the stock market with readers for a while. So I hope you don’t mind if I steal the limelight from our definitions series to take you on a journey through investments.

As you may remember, I have been investing steadily in standard 401(k)s for quite some time. In fact, due to job changes, my husband and I also have IRAs. So we’re pretty well started on our path to retirement. But with talk of Social Security disappearing way before we reach our walkers-and-canes years (aka retirement), we thought it would be wise to invest in the stock market as well.

Investing in Stocks

When we decided to invest in stocks, I knew we were able to invest for a very long term (40 or so years), so I researched dividend stocks. As stated in the definition post, dividend stocks pay investors periodically in addition to providing a rising stock price (or what we all hope is a rising stock price…).

This option appealed to me because I knew that the dividends could be reinvested as fractional shares right back into the company. Through the years, my money would make even more money for me. Then, when I reach retirement and decide I want to receive the dividends as income, I can change my account’s settings.

Taking the Money to My Broker

Now comes my fear: I was scared to speak to the broker, Kim. I know, I know: it’s silly to be frightened of a very nice woman. Especially when my grandmother has known her for 25 plus years. Especially when I worked at the same company with Kim for five years. Especially when I had completed my research and knew exactly what I wanted.

So why was I scared of speaking to her? My fear actually boiled down to my "small" investment. I only wanted to invest $1,000 at the time, and I was afraid she’d scoff at my tiny purchase. Also, I knew what I wanted, but I didn’t yet know the process.

The Investment Process

Thankfully, Kim didn’t laugh at my "measly" $1,000. She merely shrugged and said, “You have to start somewhere.” Then she proceeded to explain the process.

At my bank, I can either sit down with Kim to discuss my options and make my purchases, or I can complete my transaction online. The online transaction fee is about $20 cheaper, but for this first purchase, I was happy to pay the additional 20 smackeroos for the full walk-through.

Kim also mentioned that anytime I purchase or sell, I must wait three days for the transaction to be complete, because of rules and regulations about wires in investments. This boils down to trade dates and settlement trade dates, which we will cover at a later date.

The Purchase

Once I knew all of the details, I purchased (drumroll please…) 26 shares of General Mills. This was a few months ago, so I have already experienced a nice climb in share price (yea!) and a sharp decline recently (ick!).

However, I am still sitting above my purchase price, and I was aware before I bought the stock that I should not check it every day. Market volatility can make even the most stable stocks, like General Mills, dip. Also, the business itself will go through natural ebbs and flows in production and price. In any case, I need to sit back and enjoy the market ride, invest more as I am able, and enjoy my millions (I hope!) in about 40 years.

Anyone else out there want to share their first investment story? Was anyone nervous about the investment process?

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optionsdude's picture

optionsdude wrote:

Mon, 06/20/2011 - 19:59 Comment #: 1

Congratulations on investing. It is good to pay attention to a dividend producing stock. General Mills is a solid company. Just be sure that you keep averaging in over time. When the market goes down, you want to be able to pick up more shares for your investment. Plus any dividends will be added in. Dollar cost averaging during the market crash of 1929 saw an investor get back to even in 5 years vs 25 years by not continuing to invest. Keep this in mind.

Christa Palm's picture

Christa Palm wrote:

Tue, 06/21/2011 - 17:53 Comment #: 2

Optionsdude, thanks for the tips! I plan to keep buying, and I really do like buying when the market's lower. My first purchase was when the stock was at it's lowest and was really a super deal! I'll keep watching for more General Mills "deals" as I move forward!