For My Fellow Novice Investors.

Apr. 11, 2012 3:25 AM ET
Jeffadler profile picture
Jeffadler's Blog
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Contributor Since 2012

Full-time Pastor, part-time retail investor, focused primarily on Income-Dividend, Biotech and technology companies. I subscribe to a buy & hold philosophy, with the caveat that investing requires patience, vigilance, maintenance, and never resting on "your laurels". I believe we are constantly learning, growing, and evolving - or we have given up. Hence, I am constantly reading through the many fine articles on Seeking Alpha and other sites, trying to learn as much as I can. As Robert Heinlein once wrote (paraphrased); "Get the facts! Over and over again, get the facts. We travel always into an unknown future and the only thing we can rely on are facts". Besides my fascination with stock markets, I am a politics junkie, sports enthusiast (I bleed Cubbie blue!), family man, and an Elder/Pastor, working as the Associate Pastor for my local church.

I don't know how many of you this will help, but I suspect there are more novice readers on SA than we realize. Seeking Alpha just passed the million subscriber mark, and this is due to the wide diversity of subscribers and the mutual respect held by and for most of us. My thinking is that this may reach a few other novices, like myself, and give them a small boost of confidence and encouragement by letting you know we are by no means, alone.

I doubt that I am a typical trader/investor. I am an associate Pastor and Business Director for a small church in the NW 'burbs of Chicago. I have started late in life and am trying to play "catch up". I am also, by virtually any definition of the word, an investing novice. I subscribe to a strategy of 'buy and hold' investing, but, like the rest of us, I'm also looking for the occasional 'home run' - so I'm not beyond playing one of the BioPharma or bakken oil shale lottery ticket stocks from time to time.

The best advice I can give to any of my fellow rookies is to start getting all the education you can --- especially since now seems like a sensible time for those of us unable to devote 10 hours a day to studying the markets to immediately head for the sidelines! To paraphrase Robert Heinlein; "Get the facts. Over and over again, get the facts. We travel into an unknown future, and facts are our only guides".

The second best advice I can pass along is to diversify. This is actually a biblical principle (read Ecclesiastes) and is amongst the simplest, yet very best advice I have ever received! In spite of this advice, many of us, myself included, struggle with this simple principle. There will always be some bears and there will always be some bulls. None of us can pick correctly 100% of the time, so we must diversify. Think about it - if Warren Buffet makes mistakes, the rest of us are certainly going to fumble on occasion, also.

My advice to anyone reading this with youth on your side: start investing now! Don't do it haphazardly. Do your research; learn all that you can, but start now! Develop a working strategy (I suggest the 80-10-10 rule: 80% for daily living, 10% tithe [for God], and 10% for saving and investing.) You'll thank me in 40 years. Also, those 8:00 A.M. Macro, Micro, and Statistics classes are way more important than you realize. Knock down a couple of Red Bulls and get everything you can from those classes!

Finally, be patient. We've all heard the adage; "the waiting is the hardest part". This is, however, absolutely true. Patience is a must. When you get those emails or see those web sites promising 1000% annual returns, guaranteed, they are lying. Get all the education you reasonably can and remember the advice our Dad's gave us; "if it seems too good to be true, it probably is."

Though I don't normally endorse books, except the Bible, of course, I suggest you spend $9.00-$10.00 at Amazon and get this: "Basic Options Trading: Options Strategies For Beginners", by Rocco J. Pendola. It's a quick read, explains options fundamentals well along with helping us novices get a handle on the ridiculous number of acronyms in this business, and no, I'm not a paid endorser for this book.

The best of luck to all, and may God bless each and every one of you.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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