There are a lot of people that say, when it comes to trading and investing, starting with what you know is not a good idea if you want to make money with stocks. They'll say there's no financial basis behind it.
Well, I think it's a great place to start and here's why.
Start with Brands You Know
(here's why + how)
I love purses, they are just my thing. I know when Coach (COH) is coming out with a new style and that gets me geeked up and excited. I can’t seem to pass up a cute purse, you should see my closet. Knowing that is where I spend most of my money and that’s what excites me, their stock was the perfect place to start.
I am also a tech geek. I am always going to Best Buy (BBY) because of my love for electronics and my need to play with different electronic items before deciding which little toy I want next.
So, I started with those two things.
Please remember this is not investment advice. I'm just explaining to you why I started there.
Why you should start with companies you know
This is where anyone new to investing and trading should start. Starting with the companies and products you already know will excite you and it will keep your interest. You will run into a lot of information about the stock market that will be intimidating and it may make you want to quit. But if you are looking at stocks of companies and products that you already know and something that excites you, then you will be more inclined to keep researching that specific company.
Just like with Best Buy, I knew certain things about Best Buy because I always went there. I knew if they were making improvements, changing their layout or bringing in new products.
Just to give you another example. My brother Jeff is a chef. He asked about food and adult beverage companies. This would be a great place for him to start because he knows about that industry. He knows if that industry is expanding or coming out with new products. He knows about the products that are doing well and the products that aren’t doing well. He knows what products are on the cutting edge or the products that are doing the best in that industry. Making this a great place for him to start.
If you are a lover of adult beverages that industry would be a great place for you to start. If you have knowledge about wines and different vineyards, this would be a great place for you to start. That wouldn’t be a good place for me to start because my pallet is not that sophisticated. 😂
Ideas to help you get started
Take a look around you. Look at your appliances. Is there a certain brand that you prefer over another? If you had to go out and purchase a new washer and dryer today, what brand would you be looking to buy? The same things goes for your electronics. Is there a certain brand that you love?
My family will always buy a Samsung television. Although Samsung does not have stock on the US market, I want you to begin thinking about the things that are around you, starting with the products and brands you already spend your money on.
Are there certain types of medications that you or your family use? Take a look at who makes that medication. After all you are spending your money on these products. You know if the medications are working for you or your family member so WHY NOT start there?
Think about your car. If you had to replace your car today, what brand or manufacturer would you go to? I know several people who will only buy foreign vehicles and some will only buy American made. Whichever the case, you know the quality of their vehicles. You know if it is a brand that they are willing to put your money into. It’s something that is familiar to you, it’s what you know and that is why I believe you should start there.
Now…. will these stocks always be a great investment? Will you always be able to make money with these stocks. NO, definitely not. There are other details you'll want to look at about these companies. Just because this is where you like to spend your money, doesn’t mean that it’s going to make the best investment. But, you won’t know if you don’t start there.
So, this is why I started with what I knew. If I had to learn about bio-tech, I would have been like... Umm No! I wouldn't be interested.
When you start with companies and brands you know it’s familiar, easy, and keeps you motivated.
Join the Conversation
What companies or brands do you know well? Tell me in the comments!
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