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I’ve been investing for close to 17 years now (which coincidentally is about half my life!) and have learned a lot. I’ve made plenty of mistakes along the way, but have also had my fair share of successes too. Today I am going to talk to you about my 3 biggest investment successes and the two things they all have in common. The good news is that you can learn from my success and avoid the failure by following along. Here they are:
Table of Contents
This was my first ever investment. Back in high school, I took an economics class and we read One Up On Wall Street by Peter Lynch. In the book he mentioned about going to the mall and seeing what people buy. If you can find something that people are buying, the stock of that company is something to look into. So I did just that.
It’s amazing what you can learn from watching other people. I saw that Victoria’s Secret was packed! Plus, I noticed that a ton of women just walking around the mall all had the pink striped bags.
I made it a point to go back to the mall (as well as another mall) a few times just to make sure they weren’t giving away free underwear that one day. They weren’t. The store was always packed.
I headed home to look up the stock but sadly couldn’t find it. I can’t remember what I did, but eventually I realized that it was part of a company called Intimate Brands. In addition to Victoria’s Secret, they also owned Bath and Body Works and a few other retail stores. While they were their own company, 84% of it was owned by The Limited, which at the time owned The Limited, Express, Lane Bryant and more.
Since I was under 18 and couldn’t buy stock, my Mom opened up a discount brokerage account for me and made the trades. On a side note, the discount broker industry has come a long way. Back then I think I paid close to $25 a trade. Now you’re a sucker if you pay more than $10!
I held the stock for a few years until 9/11 happened. When the markets opened back up, stocks tanked and we headed into a recession. I was holding for the long-term and knew that we would come out of the recession. I wasn’t worried about the company long term but others were and drove the share price down to $9. I bought a boatload of shares.
In the following years, the recession ended, stock prices rose and The Limited ended up buying the other 16% of the company. I ended up selling out a few years later since the company was more about clothing than specialty lingerie and body lotions when I bought. I am happy to say I made over $5,000 on that investment. (In the past few years, they ended up selling off most all of the clothing brands and are much like they were back in the day.)
One quick side story: every year they would send me the annual report. It always had pictures of the models wearing lingerie. I think they did that to keep your focus off of the numbers. But one year, they included coupons in the annual report. One was for a free pair of underwear. I walked into a Victoria’s Secret and picked out a pair for my girlfriend and walked to the register. When the clerk couldn’t get the coupon to work, she asked where I got it. I told her I was a shareholder and that it was included in the annual report. I guess she thought I was some big deal since I owned the stock. Little did she know at the time I only owned 25 shares. The best part though was that there were a ton of people in line and they too all looked at me like I was a big deal. It was a great sight to see.
Schwab 1000 Index Fund
Another great investment of mine is a mutual fund from Schwab. I was toying between two of their funds, one that closely resembled the S&P 500 and the 1000 Index fund. After looking things over, I went with the 1000 Index fund.
To open an account was just $100 and then all I needed was $1 (that’s not a typo) for additional purchases. I ended up starting off with $250 and then set up a monthly transfer from my checking account to my Schwab account each month. I made it a point to consistently invest each month.
Most times it was $50. Sometimes when I had extra cash, I would invest that too. When I bought my house and money was tight, I had to cut back but kept investing $25 every other month. I also would put any Christmas or birthday money that I got into the fund too. This was mostly during the housing collapse. No matter what the stock market did, I kept plugging away with more purchases.
Fast forward to today and I still own the fund. I don’t invest on a set basis any longer, not because of the fund however, but because most of our money goes into our retirement accounts first. What is left goes into various taxable holdings.
Over the course of close to 10 years, the stock has returned close to 25% for me, mainly due to me buying throughout the downturn of the market back in 2008.
Van Kampen Comstock Fund
I can’t really take full credit for this one as it was done for me. But the lesson is still a valuable one. When I was growing up, my grandfather would give us grand kids $1,000 for Christmas. I never knew about this until I was in my teens. And once I knew about it, I wanted to get my hands on it!
It turns out he would give the money to my parents who in turn invested it for me for college in the Van Kampen Comstock Fund. Looking back, this was a much better choice than giving the money to me directly.
I don’t know what the fund returned over the course of the 18 or so years my grandfather gave us the gift, but I do know it helped me to graduate from college with very little student loan debt – to the tune of just $8,000.
The Lessons From My Success
Can you pick out the underlying messages in my success? Here they are:
- Just invest – don’t try to time the market
- Stay invested for the long term
That’s it. Simple but not very easy when you take into account our emotions. You have to learn to keep your emotions out of investing. Remember that the market always comes back after a fall. It might not happen overnight, but in time it will come back. It always has and it always will.
When the market is down, not only do you have to stay invested, but you have to keep investing too. By doing this you are buying investments while “on sale”. Sure they might go down in value over the next few weeks, but look long term and remember what I told you in the paragraph before: the market always comes back.
If you need any help with investing for the long-term, feel free to reach out to me and I will help in any way I can. You can read my stock market millionaire post for more information on how to be a successful investor or you can check out my book, 7 Investing Steps That Will Make You Wealthy. Both will teach you to be a better investor (with the book going into more detail than the post).
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.
18 thoughts on “My 3 Best Ever Investments (And What They All Have In Common)”
That Victoria Secret story is classic, haha… Love it. How often do stock holders receive free undergarments?! Or half-naked models on the annual reports? 🙂
@J. Money: The free underwear was only that one time. The half-naked models was every year. The annual report usually had the women on one page and the financials on the next page.
Great take-home points! We max out our 401(k)s and Roth IRAs every year no matter what (well, no more 401(k) for me now that I’m not working outside the home anymore). I really do like dollar cost averaging in this way because it completely takes the emotions out of it. The most important thing is to just start investing, and your advice to not try to time the market is spot on.
@Dee @ Color Me Frugal: When you can control your emotions, you will win at investing. Great job maxing out your accounts every year.
Question for you: what do you use for a retirement plan since you don’t work outside the home? Just curious as there are options out there for self-employed individuals to save for retirement, like a SEP-IRA, a solo 401k, etc.
Staying invested for the long term is key. I don’t fall prey to the hysteria of the temporary ups and downs.
@Stefanie @ The Broke and Beautiful Life: Good to hear Stephanie. It’s easy to get caught up in the hype and the doom and gloom.
Im 35 years old and I know crude is way way down right now. I have been contemplating purchasing an oil EFT. Do you think that would be a good or bad idea right now? I’m thinking long term investment not rich over night.
@Angelica Lovato: As long as you are looking at it from a long-term point of view, it could be a good buy. We aren’t going to stop using oil tomorrow. Hybrid vehicles are just starting to take off in popularity here in the US and electric vehicles are too niche yet. With the demand increasing from emerging countries and the world economy slowly growing stronger, the demand for oil will continue to exist.
But with that said, you have to look long-term at this. After all, I can’t tell you if it will continue to drop or start rising soon. As long as you are looking 5-10 years into the future, I think it could be a smart investment.
We only buy bonds or dividend paying stocks so when the market tanked a few years back, our net worth took a hit on paper, but we held everything for the long term and those interest and dividend payments just kept right on coming. And when we reinvested, many of the things we bought were seriously undervalued and have since given us a great return on our investments.
@Kathy: Same here with the drop of the market. I’m glad to hear you realized that the loss was only on paper and stood your ground. The market always comes back, you just have to be patient.
Good points. I’ve been investing in a mutual fund that has not done very well this year (prior to this, it was doing just fine). However, based on what they’ve done in the past, I anticipate the fund improving over the next year or so. I keep my eye on the end goal – long term.
@Little House: It’s all about the long-term.
Your takeaway on just investing, and not worrying about timing, makes sense. And think long-term of course.
The index fund route works for me, in that the reality is that more than half of actively managed funds do not outperform index funds. I liked your story about how they thought you were a big shot at the Victoria’s Secret store!
@Tie the Money Knot: I love telling that story. I can still picture the look on their faces. It was priceless!!
Going to the mall to see what is selling (or not selling is a great idea for finding stocks to buy or avoid. Also, look at your own purchases; what are you buying, what competitors’ products are you not buying.
My three best investments are:
@Fred: Looking at what you buy is a great plan too. You can see what you buy compared to your friends and might have something.
Damn, you made some good choices 🙂 congrats!
@Emma Lincoln: Yeah I made some good choices with these 3 but know that I’ve had my fair share of losers too!
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