So today I saw this interesting article on Yahoo Finance about women and finances that I thought was worth sharing. To be honest, money and the stock market really bored me and was anyway way over my head, until recently, when I had to roll over my 401K account from a previous company I worked for to a TD Ameritrade one. And I thought what an excellent opportunity to educate myself on investing and the stock market and basically learn how manage my 401K account on my own. Being the engineer that I am, I figured the best way to go about it, is to study it and collect data, a lot of it. So I started reading articles on the USA Today Money section and The Wall Street Journal, I spent time researching the various technical terms aka financial jargon on the web, I go to the Yahoo Finance site everyday to look at the latest going on’s in the market and when possible I listen to the Nightly Business report on PBS, which is an excellent 30 minute business news summary of the day. It took a little while but with all the studying and researching, I feel confident enough now to venture a few stock picks on my own. What surprised me though, is how much data and statistical analysis can go into coming up with a good stock pick. A lot of people think investing in the stock market is gambling with your money, which it is in a way, cause you have to be lucky more than anything else to make any money in it, but still it takes a lot of number crunching and analyzing of the company financials to have reasonable confidence as to why you are buying a certain stock, what is a good price to buy it at and how will you make money on it. It is imperative to figure out how you think, the company you want to invest in is going to turn a profit and grow their business. Remember, stock prices usually reflect the perceived growth of the company and not necessary what they are worth today. It’s also a good idea to look for companies that pay a higher dividend, this can not only be a good secondary source of income but also provide you with tax-benefits. More than anything else, what matters the most is how much risk can you actually stomach. Which brings me to the above article. I think it is true that women are more risk-averse than men when it comes to investing, but that maybe partly because women don’t like to jump into something they don’t know or completely understand. Everyone has their own style of investing, I have found mine to be more data-driven than gut feel or impulse driven. So the solution for me was to equip myself with as much information as possible. I still have a long ways to go before I learn everything there is to learn or be all set for retirement, but it’s not as complicated as everyone makes it out to be, it’s definitely not rocket science. If you spend a little time on it, you’ll see, it’s actually quite interesting!
(Article via Yahoo Finance)