Empowering Ladies in the Stock Market

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

 

Timing is Everything: Ensuring Survival in the Stock Market

I recently read an article by a financial advisor claiming one of the biggest mistakes an investor makes is timing the market.

 

Unfortunately I'm not surprised to see this because MOST financial advisors sell products and don't know anything about actually analyzing a stock, ETF, or other equity. So, what's their recommendation? Buy and hold. Sound familiar? And if you're religious: Buy and pray. Pray that your investment goes up. 

 

I've been investing in the stock market for 16 years now, and I've been doing it well for 10 years. I know what it's like to suck at the stock market, because for the first 6 years I bought into the "Buy and hold / pray" strategy. 

 

On the flip side, I know what it's like to be successful in the stock market and have done so for the past 10 years. And let me tell you from experience: For a successful investor, Timing is Everything! And this goes not only for the stock market, but real estate, as well as other businesses. 

 

 

 

 

You want to get on and off the train at the RIGHT time. 

 

If you don't time the market, you will stay in a losing investment for way too long. Knowing when to admit you are wrong and chose the wrong investment is essential to being successful in the stock market both long term and short term. As a part of your systematic approach, you have to decide before you get into an investment what your exit strategy is. You have to know when to get out! I cannot stress this point enough. If you don't have an exit strategy for a bad investment you will lose way more money than you ever make. 

 

You define your exit strategy by setting 2 goals: (1) Profit, (2) Loss, also known as risk. You decide how much you are willing to lose (risk) before you enter into the trade so that you have a plan to stick to for your exit strategy. It helps keep your emotions in check. Entering or exiting an investment based on your emotional state will ensure you lose money. Have a plan, and stick to it! 

 

For the past 10 years, my results have looked like this: For 10 investments, 7 will be profitable, 2 will lose money, and 1 will be stagnant with no profit or loss. 

 

Because I minimize my losses by following my exit strategy and let my profits run, math guarantees that I will continue being profitable as long as I stick to my systematic approach: timing the market. 

 

Best of wishes to you on your financial journey!

Aneshia

Just Do It: Money Management and Investing Now

A couple days ago my client asked me when she should start investing in the stock market. She had been unemployed a couple months and was excited about starting her new job the day after Memorial Day. She asked me whether she should pay off her debt before beginning investing in the stock market. My answer? Absolutely not! 

 

Based on my decades of experience, my recommendations for her, as well as all of my clients are to pay off debt and invest in the stock market at the same time. From her base salary, set aside 10% for her financial freedom fund. Even if she can't afford 10% now, start at 1% and work her way up to 10% and possibly more. 

 

In the words of the infamous Nike commercial, Just Do It! And might I add: "Now"  

 

 

I personally like to set aside 10% for Giving, 10% for Training, 10% for Play, and 10% for Contingency (some call this an Emergency fund). I also set aside a portion for my Necessities (aka bills). The remainder goes into my financial freedom fund. This is what funds my investments in the stock market. 

 

If your company has a 401k type of investment plan, start investing immediately. If you have your own brokerage account, build your financial freedom fund up to $2000 before deciding on what and how much of a stock, ETF, or equity you will buy. 

 

There are always opportunities to make money in the stock market, even when we were in a down market just a few years ago. All you need is the correct strategic approach. 

 

Best of luck to you on your financial freedom journey!

Aneshia 

 

Detroit Bankruptcy... Someone Dropped the Basket

Just a few days ago, the city of Detroit filed for bankruptcy. Meaning, pensions could evaporate .... jeapordizing retirement, and forcing retirees to return to work.  

Ladies, please don't put all your eggs in 1 basket...especially if you're not the one holding the basket. Pensions backed by cities, a company, or the government are not guaranteed.

Just because you spend years putting money in doesn't ensure you will get that money back when you need it most..at your retirement. Now, I don't have a pension but the law requires I pay into social security..an account that may no longer be solvent when I am of legal age to withdraw from it. In other words, this is someone else's basket.  

So I took control of my retirement by establishing other baskets. I set up multiple accounts: savings, financial freedom, and trade accounts both long and short term to ensure that I retire on my terms.

Have you done the same?  

Imagine having to go back into the work force when you're in your 60s or older. Freedom is working because you choose to, not because you have to.  

Best of luck to you on your journey.  

Aneshia

Quotes to Live (Trade) By

Ladies, when is the right time to start investing in the stock market?

For those of you who may be feeling stuck or hesitant about investing in the stock market, the following quote applies to you -

"You've got to live life, not think about it. Step into the midst of things, try and fail and learn and stand up again. The question is not whether you will or will not make mistakes - you will. The question is do you want to learn and grow, or do you want to shrink back and be stuck? Take that step you've been avoiding. You can succeed, or you can get feedback that it didn't work, but in either case you are sure to feel alive." - Unknown

That being said, analysis is important when investing in the stock market, but don't allow yourself to be paralyzed by it.

Release the fear; Make your move.

 

Best of luck to you in your investments!

Aneshia

Income vs. Assets, Financial Freedom vs. Financial Bondage

Ladies,
Do any of these questions sound familiar?

How much money do you need to retire? How much money do you need to never have
to work again? How do you ensure you don't outlive your money? Let's face it.
Most everyone asks these same questions because most everyone has the same
answers.

Most people focus on building your nest egg to answer these questions. And they
do so because they expect you will spend the money in your nest egg during
retirement.

I encourage you to look at your retirement a little differently. If you made
enough passive income every month to pay your expenses then you could retire,
you would never have to work again, and you would not outlive your money. Why?
Because you'd never spend the money in your nest egg without getting a return on
your investment in the form of monthly income. THEY talk assets. I talk
income. 

Ladies, there are so many investment ideas out there. But a lot of them create
financial bondage, and not financial freedom. And it's easy to tell them apart.
The businesses that require you to work harder create financial bondage. The
businesses that allow you to work less create financial freedom. And the
ultimate financial freedom is being able to get paid without physically having
to be there at all.

If you asked the average person whether owning a parking lot would be a great
business idea, very few would immediately say yes. I mean let's face it, it's
not very glamorous. But if you think about it, you don't have to be there to
collect money. There are many parking lots that are unattended. While the person
pays their money into a machine, you can be off spending time with your family
or on vacation somewhere.

And there are plenty of businesses in a wide variety of industries that can
create financial freedom.

All the best to you on your journey!
Aneshia

Having a Mentor - What's in it for You?

Hi Ladies,

I learned the importance of having a mentor the hard way...several years ago
after I had lost several thousand dollars in the stock market when I was
investing based on trial and error. Shortly after that financial debacle, when
the opportunity came for me to learn from my mentor, even though I was initially
hesitant about making the financial investment to learn from a proven expert, I
asked myself one simple question:

What has NOT having this mentor cost me?

Looking at it from that perspective, the answer was simple, as I refused to
continue losing money in the stock market going through the same mistakes again.

Ladies, for you, the cost might be lost opportunity. Because as many folks have
and will continue to lose money in the stock market, I can tell you from
personal experience there have been many of us who have and will continue to
make money using a systematic approach. And it doesn't even have to be my
approach, just as long as it is systematic (repeatable) and prevents you from
relying on your emotions for results.

I have chosen mentors in other areas of my life as well, both personally and
professionally. All I did was find someone who was successful at what I wanted
to do. In some cases I paid them for formal training. In other cases, if we were
in the same city, I took them to lunch. It can be as formal or casual as either
of you agree.

Ladies, it's not a matter of whether you will reach your goals. You may reach
your goals without having a mentor. It's more a question of how much longer will
it take and at what additional cost?

All the best to you in your endeavors!

Aneshia