As part of a Money Mavens group project, we have decided to talk about our first time. The first time is always exciting. You are nervous; you don’t want to make any mistakes. This is why you try to take your time even though you are very excited. I have to say it; when it comes to your first time, you really feel like a man!
How was my first time?
The first time happened right after I had my first job. I was looking for a way to treat my girlfriend and earn extra money. The problem is that while I really wanted to try it, I didn’t have enough resources. This why I applied for a line of credit and start investing with this liquidity. What? You thought I was talking about something else? 😉
I was working in an investment loan department where we used to lend millions of dollars to clients who wanted to borrow and invest in the markets. It was back in 2003, when everything was possible. This is when I decided to follow the trend and take my chance in the big world of stock trading.
Small trades at first
I didn’t want to push my luck too much and I didn’t know much about investing at that time. I discussed the strategy with my girlfriend and she told me she was ok if I traded about $3,000 to $4,000 from the line of credit. I bought my first shares of Power Corporation, the company we were making loans for. I bought one hundred shares and I was very happy to buy a solid company paying a 2% dividend yield ;-D
Then, on with the real stuff
I soon realized that the “buy and hold” strategy was pretty boring for an active young man like me. What is even more boring is logging onto your broker’s site to look at your only position in the stock market moving at 0.2% per year… BORING! I thought I needed more challenge and while I was getting “trading tips” from people in the industry; I started to borrow more from my line of credit.
Within the span of 3 months, I maxed my $20,000 line of credit and I was making some real good trades. While I wasn’t given any insider information, I know several people operating in the stock trading field. This combined with the fact that 2003 to 2006 were very good years on the stock market was enough to create some decent yield in my portfolio.
After my first year of trading, I was generating more than 20% return. I was such fun since it wasn’t even my money ;-D.
So my first experience was awesome, I want to do more!
I didn’t change much from my first time. The difference is that I am not investing on the stock market anymore but I am investing in my own company. The dividend yield is much higher and it is a challenge everyday ;-D. If I had to start all over again, I would borrow the 20K and risk it. In the end, when you are in your early 20s, 20K is not that much to risk!
Other Money Maven’s first time:
Canadian Finance Blog says “I should have bought ETF’s”
Monevator’s first time