By: Phillip Heilman
Many people around the country took up new hobbies last year during quarantine. Some learned how to play the guitar. Others honed their baking skills.
I became obsessed with day trading.
I’d always wanted to better understand the stock market, and 2020 felt like my opportunity. I had extra time on my hands, a few dollars saved away and an app already downloaded to my iPhone.
Feeling confident, I took the plunge. I put in $1,000 and built a strategy around airlines and other stocks that had plummeted at the start of the coronavirus pandemic.
That turned out to be a sound decision. I didn’t make life-changing money, but it felt good each time I sold a stock at a price higher than I had bought it weeks or months before. One example was Delta Air Lines, which I bought at $20.79 per share and sold at $34.30 per share. Turns out the old saying is true: You never go broke taking a profit.
Then something unexpected happened: I started to act like one of those mean Wall Street bosses you see in movies. The time I spent staring at stock prices — $20.05 … $20.06 … $20.07 … $20.06 … — went from seconds to minutes to sometimes hours. When the price of one of my stocks went up, I impatiently waited for it to go higher. When it went down, I seethed.
After several months of this unhealthy cycle, I realized that while day trading had so far been a good thing for my bank account, it was unsustainable. The S&P 500 surged more than 50% from the pandemic low in March to November, and that growth that gave newcomers like me an inflated sense of confidence. And even when I was capitalizing on a good investment opportunity, it was really stressing me out!
Simply put, I needed a different way to invest.
After researching several top financial services companies, I decided that getting personalized service from a professional was what mattered most to me.
Within days of my first call, I was sitting in an office with an advisor who listened as I explained my current financial situation and my goals for the future. My advisor encouraged me to open and max out a Roth IRA — up to $6,000 per year for individuals like me who are under age 50 — and create a separate long-term strategy utilizing mutual funds for the rest of my money.
It was refreshing to work with someone who took the time to understand my specific situation, and knowing my advisor had the acumen to develop, explain and execute a smart plan helped my blood pressure. Now, I have several investments working toward my retirement, in addition to my 401(k).
I still have a habit of checking how my accounts are progressing, sometimes several times a day. (What can I say? I’m the kind of guy who checks my fantasy football team during the offseason.) I even still give myself a few bucks here and there to do some day trading.
But each time I open my apps, I know that whether I am in the green or in the red on any specific day, my long-term investments are helping me build a better future.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.