Empowering Ladies in the Stock Market

Balance: The Key to Breaking the Overspending Cycle

 

If you want to reach your financial goals, it helps to have multiple accounts. As a minimum, include the following:

1) FFF - Financial Freedom Fund for the money you need to invest in the stock market or a business that will produce passive income.

2) Contingency - for the money needed for life's unexpected circumstances (car breaks down, pet needs surgery, unemployment, etc.). Typically 3 months of your net salary.

3) Give - for the money you want to give to charity, church, or someone you want to help.

4) Nec - short for Necessities for the money to handle your bills.

5) Play - for the money to enjoy life's pleasures.

 

 

Notice I saved the best for last. If you have a Play account for money you have to blow every month, you are much less likely to sabotage your FFF account. You still make sacrifices but it makes sacrificing in other areas much easier.

I've seen programs from people who say you have to practically starve yourself (Go without utilities, etc.) in order to reach your financial goals. To each, their own. I know life was not meant to be difficult. Yes, challenges here and there, but a struggle? Absolutely not! When you find your flow, get into a rhythm of financially responsible habits, things fall into place.

Here's a simple check on your financial condition: just look in your kitchen pantry. Are things in order, or does it take you 10 minutes to locate that canned good?

How you manage your money is key to being financially successful. Respecting and valuing money go hand in hand. If your kitchen cabinet is a mess, chances are your finances are too. But it doesn't have to stay that way. Start now.

Follow the simple money management approach I noted above and watch your world change. It worked for me and it can work for you too!

Aneshia

Busting a Stock Market Myth

 

Last week at a networking luncheon, I ran into a lady, who remembered me as the one who “plays” the stock market. As in “playing slots in Vegas”? or maybe “playing games”?

Now, I can assure you there is no play involved when I invest in the stock market. It is a business for me and I treat it as such.

In the past 15 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 reach our goals and dreams.

Stock Market Myth
Trading or investing in the stock market is like gambling.

Some ladies believe that trading in the stock market is like gambling. Truth be told, trading in the stock market is only like gambling when you don’t use a systematic approach. So for many women, I am sad to say, it is not merely “like” gambling…it IS gambling. Only this time, your retirement or family’s future is at risk, not just a few dollars you put in the slot machine.

This used to be the case for me back in the late 90s when I had very little knowledge about the stock market and all I had was my 401k. My investment decisions were based on my emotions or even worse, someone else’s expertise without understanding their methods for selecting stocks. It can be difficult to understand someone else’s methods especially when they don’t have any. You’re better off opening up the financial section of a newspaper, closing your eyes, and pointing your finger at the page.

Now that I trade and invest based on a systematic approach, the odds are definitely in my favor that I will be profitable and continue to be into the future. And for those of you who don’t want to trade, but still want to be able to monitor the funds you select in your 401k or IRA investments, then there is a systematic approach that can work for you too.

All the best to you!

Aneshia

The Ordinary Habits of Rich People

On the financial freedom journey, I've learned that consistency to the point of boredom pays off in the long run. 

 

One of my clients expressed disappointment because the solutions I recommended to her were not as exciting as she expected. I asked her, if this approach gets you to your financial goals, then who cares? You can create your own excitement when you're financially free. Knowing you are on your way to your goal should be exciting enough. 

 

As you already know, some habits can be as boring as watching paint dry. But that doesn't render them any less effective. 

 

 

 

Setting aside money into both your contingency and financial freedom fund accounts can seem ordinary after doing it over and over again for years. But the results can't be denied. Let the excitement of your results motivate you to continue. 

 

The key to financial freedom for me is generating enough passive income to pay my expenses. Writing covered calls is a technique I use in the stock market to generate passive income. I use the same systematic approach doing the same steps with different stocks and ETFs over and over again. And because I've been doing these steps for so long sometimes they can seem ordinary. 

 

However, I let the excitement of buying my condo outright with cash a couple years ago and becoming mortgage free motivate me to continue the financial habits of becoming wealthy. 

 

Remember to stay the course and eventually you will reach your goals. 

 

All the best to you on your financial journey!

Aneshia

Applying Social Investing to the Stock Market

 

Investing in companies that are environmentally conscious, promote diversity, oppose product testing on animals, or promote women's leadership are examples of social investing. 

 

One of the lessons I have learned over the years is that you can still practice socially responsible investing without being guided 100% by your emotions. If you feel passionate about a company AND your systematic approach supports it, then by all means it could definitely be the right company or fund for you to invest in. 

 

 

  

 

On the flip side, if your systematic approach shows a company is a good stock to invest in, but your gut instinct tells you not to do it, as I told one of my clients a few months ago, then by all means, follow your instinct.  In fact, even though it's not required for every investor, there is absolutely nothing wrong with adding "Gut Check" as a step to your systematic approach. 

 

Many investors are detached from the companies they invest in. Nothing right or wrong about it.. no judgment here. But there are those investors who care about the social impact of companies and choose their investments accordingly. The great news is that either way, each investor can still use a systematic approach. 

 

All the best to you on your financial journey,

Aneshia

Keep It Simple Stocks: Applying the KISS Principle to the Stock Market

Some traders like to boast on using complex trading strategies, such as collars and other advanced trading techniques. They are basically multiple positions around the same trade. 

 

In the world of options, it all boils down to calls and puts. 

 

In my short term trading account, I trade options. Short term for me averages from 1 day to 45 days that I own the option. In my last post I talked about one of my tools - BigCharts.com. If the stock chart shows me a stock will likely go up, I will buy a call option on that stock with the intention of selling it within 45 days. On the flip side, if the stock chart shows me a stock will likely go down, I will buy a put option. I don't buy both calls and puts on the same stock at the same time. I Keep It Simple...KISS 

 

 

 

 

Some folks choose to mix calls and puts on the same stock resulting in multiple positions on the same stock. These strategies may work for these folks, but it's entirely more complicated and more expensive than it needs to be. KISS. 

 

They cost you more than what they gain you because of the commissions you pay for having multiple positions on the same trade. 

 

I had a client who wanted to complicate the process for writing covered calls. Writing covered calls involves 2 steps: 

 

1) Buy the stock or ETF in 100-share blocks. 

2) Sell a call option on that stock or ETF you just bought. 

 

In the infamous words of Bugs Bunny, "That's all folks." 

 

Well, this client wanted to add another step to the process: step 3 for her included buying another call option on the same stock. When I asked her why she wanted to do this, she said because someone else told her she could do that. I reminded her that writing covered calls involves 2 steps and only 2 steps. I told her she could do what she wanted but her commissions would eat up her profit and more importantly, she's over-complicating a process that's a simple process. 

 

The ultimate conclusion is this: Making a simple process more complicated does NOT guarantee better results. 

 

All the best to you in your investing, 

Aneshia

Investment Tools - It's Not What You Use, It's How You Use It

 

There are so many different investing tools out there... so much information available to investors. It can sometimes be overwhelming if you're not careful. 

 

A hammer is a great tool. You can hang a picture or build a deck. But until someone shows you how to use it you could wind up smashing your finger. 

 

I use the following stock market tools on a regular basis:

 

1) Investors Business Daily (IBD) 

2) BigCharts.com 

3) CBOE.com 

 

I use the IBD to update my watch list. I use BigCharts.com to determine when to buy and when to sell a stock, ETF, or an option. I use CBOE.com to determine which call or put option to buy or sell. 

 

You can "smash a lot of fingers" using stock market tools incorrectly.

 

 

They all provide a wealth of information but if I didn't learn from my expert mentor 10 years ago how to use these tools, I'd still be losing money in the stock market and jumping every time an analyst on CNBC made a dreadful prediction of a company's bleak financial outlook. 

 

CNBC is a tool of choice for many people. Don't get me wrong, because information is typically a good thing. But only if you understand whether the information is important. 

 

I know many of you have heard of the 80 / 20 principle. Well, I practice the 80 / 20 principle in the stock market as well. I focus on the 20% of information that gets me 80% of my results. I don't get stressed by anything I hear on television or the internet about the stock market. That's because most of the information doesn't matter to me and has no direct influence on the outcomes of my trades. I stick to my systematic approach. 

 

Now if I were a day trader I'd probably care more about the crazy day-to-day whims of the market. But since enjoying life means not being glued to a computer all day long watching stocks, investing has become essentially stress free for me. And it can be this way for you too!

 

Best wishes to you in the stock market, 

Aneshia