Investing 101

I just finished reading the book, Investing 101, by Kathy Kristof.  I consider myself somewhat knowledgeable about basic investing…enough to have a diversified portfolio.  And certainly enough to be able to have investing discussions with the elementary and middle school students I work with.

But continued education is always a good idea.  Besides, in the financial world, things change so it’s important to keep up with them.  After reading the book, I gave myself a pat on the back…not because I finished it, it’s actually an easy read, but because John and I have been doing many of the things she suggested.

One area that really made an impression in terms of things I should discuss with my students, was inflation.  Although putting money into CDs and bonds are great first investments for kids, over time they will not keep up with inflation.  And since kids have all the time in the world, getting them investing in mutual funds and individual stocks early on is a pretty good idea.

In the book, Kathy reminded us to keep our emotions in check when investing in the stock market.  “Have a plan”, she wrote.  “Decide what the price will be when you want to sell and then stick to the plan.” 

This reminded me of Ryan when he bought his Chipotle shares.  He had decided that when they reached sixty-something he would sell several shares and buy in to Costco.  And that is exactly what he did.

But what really amazed me about Ryan’s story was that after he sold his Chipotle shares, the share price continued to go up.  He seemed unnaturally okay with that.  But he had set his plan, followed through, and not looked back.  Wow.  If I was honest with myself I’m pretty sure I would have spent some time brooding about selling too soon.  Perhaps I need to listen more to my own lesson about not getting emotionally attached.  Seems Ryan is already one step ahead of me in that area…and a bunch of other areas…