Empowering Ladies in the Stock Market

True/False – Common Myths About The Stock Market – Myth #6

Stock Market Myth #6

You have to be debt-free before you can begin investing.

 

As a stock market coach for women, one of the most common questions women ask me is “How do I start investing in the stock market when I don’t have any money to start with?” My answer is always the same: A balanced money management plan is essential to financial prosperity.

 

As part of a balanced money management plan, set aside 10% of the income from your employment (job or business) into a financial freedom fund. This money will be used to invest in the stock market or your chosen investment that will produce passive income. Passive income, income you make without having to trade your time for money, is essential to financial freedom. For many women, money is not what they are after. It is the time that is freed up to be able to do the things they want to do that is the ultimate goal. Generating enough passive income to pay your expenses is the key to freeing up your time to spend with your family, traveling, or doing whatever activity you love.

 

Many women are struggling with debt, especially with the challenging economy. The conditioning has been that you must pay off all of your debt before you begin investing. This is one of the biggest myths that can delay you from reaching your financial goals. As a part of a balanced money management plan, in addition to the 10% that has already been set aside for your financial freedom fund, also set aside another 10% or more for paying off your debt. This is not an either/or scenario. Do them both at the same time.

 

Consider the following scenario: If you decide to pay off your debt first, depending on your personal situation, in 5 to 10 years from now, you are debt free. Well, if you have not begun growing your financial freedom fund, it is still at zero. It is much harder to start from zero, because you do not have momentum on your side. In the case of the stock market, you have also lost out on profits from not having that money growing in the stock market. And…

 

If you have not modified the behavior that initially got you into debt, you will attract a financial challenge that will send you right back into debt.

 

All the while, your financial freedom fund sits at zero. Use momentum to your advantage and do both at the same time.

 

Part of the stock market training that I teach women involves virtual trading, or paper trading. As I mentioned in a previous post, virtual trading involves investing or trading in the real stock market without using your real money. This is necessary in order for you to prove to yourself that the systematic approach I have been using over the last 7 years works for you. Then, when you are comfortable, start investing with your real money. For women who don’t have any money to start investing, I recommend using the money management plan of setting aside 10% of the income from your employment (job or business) into a financial freedom fund. So, they are growing their financial freedom fund while virtual trading and learning the stock market training all at the SAME time.

 

I was not debt-free when I began investing in the stock market over twelve years ago. I am less than a couple of years away from being financially free, and I will actually be financially free two years before I am debt free because of what I know about the stock market, and the profits I have been able to achieve over and over again, month after month. Remember the definition of financial freedom: when you are generating enough passive income to pay your expenses, you are financially free. Debt is an expense, no more, no less. And because I do not attach any judgment to it, as long as I am generating the passive income to pay the expense, then who cares? Pay it down or off while you are investing and growing your passive income nest egg.

 

All the best to you!

Aneshia

True/False – Common Myths About The Stock Market – Myth #5

Stock Market Myth #5

You must be tied to a mobile device.

 

Ladies, for those who believe that you have to sit in front of your computer or mobile device constantly watching your investments day in and day out, I have some great news for you! 

You do not have to be a day trader in order to make significant profits in the stock market.  And you do not have to spend all day watching the market.  I manage my investments in the evenings after the market has closed. The only time that I look at the live market is when I am entering into a trade. And this is a great thing. Why? Because making your decisions when the stock market is closed will help you tame your emotions. When the stock market is open, the tendency is to feel rushed to make a decision. The biggest difference between the average investor and the profitable investor is the average investor makes their financial decisions based on emotions. The profitable investor makes their financial decisions based on a systematic approach.

 

I mentioned that the only time I look at the live market is when I am entering into a trade. Even when I am exiting a trade, I do this when the stock market is closed. I do this using limit orders. The stock market does not have to be open in order for you to place a trade.

I manage my risk and collect my profits by automating my trading so that I can spend my time doing other things and living my life. This is the way to generate passive income, income that flows to you without having to be physically present.

 

All the best to you!

True/False – Common Myths About The Stock Market – Myth #4

In the past 12 years of investing and trading in the stock market, I have learned a lot from my conversations with other women. For one, I have discovered many misconceptions about the stock market. In the interest of personal growth, I am open to learning new things.  So, once I’ve discovered that what I used to think about a particular topic is based on insufficient information, I find myself opening up to a new perspective.

So, how do some women allow their mind to take them out of the financial game? Well, while our mind can be extremely powerful, its desire for security and resistance to change can also keep us from stepping out of the box to accomplish our goals and dreams.

 

Stock Market Myth #4

You have to be good at math to make money in the stock market

The key to trading and investing successfully in the stock market is using a proven system. This is the system that I have been coaching other women on for the last 7 years. Yes, reviewing stocks using this system involves looking at charts, but the calculations are minimal, and I will show you how to do all of this. In fact, I will even provide you with a spreadsheet that does most of these calculations for you. And I will show you how to use the spreadsheet.

The trading system consists of a template, which answers the necessary questions with clearly defined steps. The template will show you how to determine what company’s stock to trade as well as your entry and exit points of the trade. Calculations are used during the risk management process. When looking at risk, you want to determine two critically important things BEFORE you enter the investment.

1)    What is your profit goal?

2)    What is the most you are willing to risk losing?

 

Let’s talk about my own personal experiences as an example.

Profit Goal

If I am investing in a stock, my profit goal may be 25%. So, if I buy a stock that is priced at $50 per share, my cost basis is $50. My cost basis is what I paid for the stock. It is critical to record this information, regardless of how many days, months, or even years you have been in an investment. I put this number into my spreadsheet. 25% of $50 is $12.50. If I add $12.50 to $50 (my cost basis), I get $62.50. So, when the stock price rises from $50 to $62.50, I have hit my profit goal of 25%. At that point, using my systematic approach to investing, I use a technique to lock in my profit.

Max Loss

On the flip side, if I am investing in a stock, the most I am willing to risk (lose) is 20%. So, once again, I have bought the stock at $50 per share. 20% of $50 is $10. If I subtract $10 from $50 (my cost basis), I get $40. So, when the stock price drops down to $40, I have hit my max loss of 20%. At that point, using my systematic approach to investing, I use a technique that will automatically sell my stock.

Risk management is critical in protecting your investment capital. Why? Because there is no system that delivers profitable trades 100% of the time. No system is right all of the time. You need to have a system that tells you when to exit a trade, so that you are not making decisions based on your emotions.