InvestED: The Rule #1 Investing Podcast

After you have found a worthy company you would like to invest in and it’s on sale, the final step is to actually purchase the stock through a brokerage account so you can start reaping the rewards.This is an important step in the investing process, but it can seem confusing because there are several brokerage options out there.Buying shares in any company will require you to go through a broker. Brokers enable you to easily buy and sell shares in any public company, but they do charge a fee for their services.Once you are working with a broker, though, buying shares of a company is as simple as ordering something out of a catalog or making a purchase on Amazon. Simply choose the stock you want to buy, the number of shares you want to buy, and complete your purchase.A great option that has come available in recent years is the use of online brokers. Online brokers are a little more “self-serve” than traditional brokers, however, their fees are also much lower.For beginner investors with small amounts of money, online brokers are the best choice because the high brokerage fees of traditional brokers have the potential to eat up any profits. A few options include Charles Schwab, TD Ameritrade, Vanguard, Fidelity, and Robinhood.In today’s episode of the InvestED podcast, Phil and Danielle discuss stock brokerages, and explain why it’s so important to do your research before you commit to any broker.Learn more about getting started and making your first investment with my Complete Guide to Investing for Beginners in 2021. Click here to download: http://bit.ly/3qo3JI1 Learn more about your ad choices. Visit megaphone.fm/adchoices

Warren Buffett’s highly anticipated shareholder letter was released this past weekend. In this annual letter, Berkshire Hathaway's quarterly reports have offered investors a glimpse into the company's inner workings. Buffett also highlighted the fact that among the biggest winners in Berkshire’s investment portfolio was its 5.4% stake in Apple. Buffett noted that the iPhone maker was now one of his company’s three biggest assets, with its stake worth $120 billion as of December 31, 2020. Berkshire ended last year with $138 billion in cash. This is likely due to the market still being extremely overvalued.  Being one of the best value investors in the world — if not the best in the world — Buffett understands the importance of only purchasing wonderful companies at discount prices.  In the annual letter to shareholders, Buffett reminded investors that miracles do occur in middle America despite much of the attention on the east and west coast.  “Success stories abound throughout America,” the investor said. “Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.” In today’s podcast, Phil and Danielle discuss a few key takeaways from Warren Buffett’s annual letter to shareholders, and why Warren Buffett and Charlie Munger are two of the most important value investors in history. Learn about purchasing wonderful companies at discount prices with this FREE guide I've created for you: http://bit.ly/3bPTyqb Learn more about your ad choices. Visit megaphone.fm/adchoices

“There’s nothing evil, per se, about selling things short. Short sellers—the situations in which there have been huge short interests very often—very often have been later revealed to be frauds or semi-frauds.” — Warren BuffettShort selling, or shorting, plays an important role in public markets as it improves prices, rational capital allocation, prevents bubbles, and shines a light on fraud. If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions. Essentially, short selling exposes which companies' stock prices are too high. In their search for overvalued firms, short-sellers can discover inconsistencies or other questionable practices before the entire market does. Short sellers can almost be regarded as the “watchdogs” of the market. A recent example of this is the Gamestop event which caused many investors to either gain or lose money, as shorting isn’t ideal for all investors. This is why it’s important to invest with your values—so you can invest with confidence and reduce your risk of making bad investing decisions.  When looking for companies to purchase, always consider the Four Ms: meaning, moat, management, and margin of safety. This is the first step you need to take when building your watchlist of companies you are interested in. In today’s podcast, Phil and Danielle discuss the important role short sellers play in our market and why it’s important to invest with your values. Learn about the Four Ms and how they can help you invest in the right businesses at the right time with this FREE guide I've created for you: http://bit.ly/3btAqhM Learn more about your ad choices. Visit megaphone.fm/adchoices

Every type of investment has its upside and downside, and some are riskier than others. Cryptocurrencies, for example, are the newest type of investment. They are unregulated digital currencies bought and sold on cryptocurrency websites. Cryptocurrencies such as Bitcoin have gained a lot of interest in recent years as an investment vehicle—some people even think it may replace gold in the future. However, cryptocurrencies remain an incredibly risky investment due to the fact that there are many unknown factors. For example, there is the possibility of government regulation and the possibility that the cryptocurrency will never see widespread acceptance as a form of payment.At this point, no one knows for sure what the future holds for cryptocurrencies, so investing in cryptocurrencies is little more than speculation. Rule #1 investors don’t invest in things they don’t know. That’s not investing, that’s gambling.On the other hand, cash and commodities are typically considered low-risk investments. So if you’re new to investing or risk-averse, one of these options could be a good place to start. However, these low-risk investments also tend to have low returns. Gold is an example of a commodity, so its price is based on scarcity and fear which can be impacted by political actions or environmental changes. If you are investing in gold, be aware that your protection against a price drop, your moat, is based on external factors so the price can fluctuate a lot, and quickly. The price tends to go up when scarcity and fear are abundant and down when gold is widely available and fear is abated. If you think the world is going to be a more fearful place in the future, then gold could be a good investment for you. Everyone’s reasons for investing and personal risk tolerance are different, so you have to decide which investment types suit your lifestyle, timeline, goals, and risk tolerance best. What a good investment is for one person isn’t necessarily a good investment for you. Listen to this podcast today for more information on your different investment options and the risk related to each.Learn more about your investable asset options with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/37ldvE2 Learn more about your ad choices. Visit megaphone.fm/adchoices

Square is a financial service, merchant services aggregator, and mobile payment company based in San Francisco, California. Danielle has openly expressed her excitement for this company—but what makes it so special?In 2009, Square initially started as a solution to mobile businesses without mobile payments. It took Founders Jim McKelvey and Jack Dorsey about 3 years to understand the market at the time, and how they could make an impact in this space. They entered the market and were able to provide a small device that could be easily inserted into the audio jack of smartphones. With this convenient hardware and only a 2.75% transaction fee, they quickly divorced the merchant from the shackles of digital wires. The successes of these innovations were multi-faceted. The infrastructure for payment processing was no longer costly for a specialized machine, but a small add-on to devices we already own. This also meant that as long as someone had the Square app, they could be a transaction node as well. Square continues to show viral growth, with revenue up year over year.This week on InvestED, Phil and Danielle welcome podcast guest Jim McKelvey, the co-founder of Square. Jim talks about his book, “The Innovation Stack,” and how innovation ultimately is what impacts a company’s success. What does it take for a start-up to turn into a successful business? Listen to the podcast today to find out. Interested in getting your own copy of "The Innovation Stack?" Order it at https://www.jimmckelvey.com.Learn how to find high-performing, innovative companies with my Four Ms checklist! Click here to download: http://bit.ly/2LzEBQ2 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is an exciting time to be an investor in the stock market.As you know by now, Reddit investors just launched an "attack on Wall Street" by purchasing shares in GameStop. This pushed the stock price up over 480% in a week. The investor who helped direct the world’s attention to GameStop is 34-year-old Keith Gill. Gill used Reddit’s WallStreetBets message board to promote GameStop, and used the identity of Roaring Kitty on his YouTube channel and Twitter page to help engineer a short squeeze against the hedge funds that were betting the price of GameStop would drop. But what is a short squeeze?If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions.If they choose to close their position, they are buying the stock to exit their position. This can drive the price higher and force other short sellers to do the same. This creates a continuous cycle of buying and pushing the price up even higher. This is the short squeeze, as those short the market essentially get "squeezed out.” And it's exactly what happened with GameStop.Hedge funds and other short-sellers have lost an astounding amount betting against GameStop, and there has been a regulatory response to this event. Robinhood limited the number of shares each user can purchase, stating that the trading restrictions were risk management decisions to protect Robinhood and its clearinghouses. In today’s podcast, Phil and Danielle discuss the GameStop situation and explain why the market should be free—where regulators stay out of the “little” guy’s way.Learn more about the basics of investing in the stock market with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/39EOFR0  Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you one of the winners of the InvestED 300th podcast episode giveaway? Listen to this podcast to find out! Investing in stocks is one of the best things you can do to set yourself up financially, but you have to first understand the company valuation process in order to actually make money.When a company decides to go public, an investment bank helps determine what the price of the company’s stock should be at their Initial Public Offering (IPO), when they become available to purchase on the stock exchange. They determine the initial price based on the value of the company and early interest from investors before the stock is available to the public. After the company goes public, the stock price is based on supply and demand. When the demand for a stock goes up, its price goes up. The demand can increase if the company is doing extremely well and its value is increasing, or it can increase simply because of excitement from other investors. It’s important to remember to not get the “value of the company” confused with the “price of the stock.” The market can be incredibly emotional and price a great company way under their true value and vice versa. Ultimately, the stock price is determined by greed when the stock price is going up and fear when the stock price is going down.This is why it’s important to invest with certainty within your circle of competence. Love what you own, and put your money where your values are. Most of us have the intention to make the world a better place, but seem to forget that the businesses that they invest in have a direct impact on what is going to exist in the world in 10-20 years.In today’s podcast, Phil and Danielle announce the winners of the InvestED 300th podcast episode giveaway and discuss rational investing in 2021.Learn more about using your Circle of Competence to pick stocks with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3pn4Bgj Learn more about your ad choices. Visit megaphone.fm/adchoices

In this podcast, Phil and Danielle discuss Li Lu's speech on value investing in China, emphasizing the ethics investors should follow. They explore the benefits of finding wonderful companies and the importance of a margin of safety. They also announce a prize giveaway for the 300th episode and share their personal journey. The hosts analyze the lack of knowledge among financial advisors and the challenge of evaluating investment managers. They explore the impact of a specific kind of investing and tease the focus of the next episode.

One of the best things about investing is that it is possible for everyone to succeed—no matter your age, income, gender or IQ. As a beginner investor, it’s easier to avoid mistakes and decrease risk by investing in companies you are already familiar with, and that have meaning to you. For example, if you work in the tech industry, it’s going to be much easier for you to understand the goals of a tech company as well as their potential to reach those goals than it is going to be for you to evaluate a company in the pharmaceutical industry.Consider your personal passions, talents, and spending habits. Better yet, map them out using a venn diagram, placing passions in one circle, talents in another, and spending habits in another.Where these three areas overlap is your “Circle of Competence”, reflecting the industries and sectors you have the most knowledge of and where you should start your search for companies to invest in.Over time, you can begin to research companies across various sectors and expand your knowledge-base and comfort zone, but investing within your Circle of Competence is the best place to start.As you embark on your investing journey, remember to stay rational, mindful, and disciplined. It is the only way you will be successful in value investing. In today’s podcast, Phil and Danielle discuss value investing in 2021, and best practices for investors of all levels to be successful in the stock market.Ensure you always make smart investment decisions with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3ozYpkJ Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s so important not to invest or sell stocks too soon.While the desire to get in on the ground floor of a brand new company or industry is certainly understandable, it is most often better to let the dust settle a little so that more information is available and you can do proper research before making an investment.Although, even with proper research and due diligence, even the most successful investors’ journeys are still fraught with errors and investing mistakes. Nevertheless, as painful as these investing mistakes are at the time, you can learn a lot from them and can use them to become a better investor. After all, no one wants to lose money on their hard-earned investments down the road. The best way to avoid losing money on investments is to follow a proven investing strategy and never stray from it. Making irrational decisions based on emotions can be costly. By avoiding greed or fear-based decisions, you can pursue a successful investing career and hopefully avoid the business and investment problems that investors like Warren Buffett and Benjamin Graham have experienced in their early years.In today’s podcast, Jeremy Deal—founder of JDP Capital—sits down with Danielle to discuss his biggest investing mistakes so that you can learn from them!Ensure you always make smart investment decisions with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/3pHRNRg Learn more about your ad choices. Visit megaphone.fm/adchoices