Think Like An Investor
It’s so common for me to go out for a glass of wine with a girlfriend and have her tell me that she wishes she understood investing. “If only I knew what to invest in,” she’ll say. My response is the same every single time, “What are you talking about!? You already know exactly what to invest in.”
Investing your money in the stock market is all about making a bet on a company’s future success. If you’re correct, your stock will go up and your potential earnings will increase. The thing that always makes me shake my head is that 85% of the country’s consumer purchases are made by women*. We buy 65% of the new cars, 93% of the food, and 80% of the healthcare. What’s more is that we talk about what we’re buying with our friends. In fact, 92% of us pass along information about our favorite product finds among our personal networks. So even if we’re not doing the actual purchasing, we sure know all about what’s trending and what’s not.
In short, they say that to succeed in investing is to invest in what you know. Well, we women know a whole lot about the consumer economy. The problem is that we don’t think like investors.
In other words, if you’re one of the 65% of women who are buying cars, you’ve done your product research, you’ve gone for test drives, you’ve noted which dealerships seem to be the cleanest, most organized, least pressure-oriented, and what marketing strategies were the most compelling. You’ve already done 80% of the research! One of Warren Buffet’s key tips for investors is: “If you’re determined to purchase stock, don’t buy into a business you don’t understand.”
You bought your car because you liked what you saw in the company that made it. They showcased their offerings and earned your trust and you bought the car. Now that’s more than a car – that’s a potential stock pick!
So now you’re thinking about buying into that stock. You just need to do your due diligence. Here’s how. You visit your favorite web browser and do a quick search. If you look at the snapshot of the past year. That trend and the company information that forecasts its future is the research that you need to do to confirm (or reject,) your interest in purchasing that stock. Do a little more research. Read some articles on the future of the automobile industry. Compare your findings and the trends back to the knowledge that you started with. Does the research and the facts support your original instinct? If so, you might have a great investment idea on your hands.
It’s time to start thinking like investors. As you walk the aisles of Target, consider a new pair of sneakers, or choose to patronize a gas station that works hard for your loyalty, don’t let your consumer instincts stop there. These are the companies that you should be looking into buying stock in. The added bonus? Every time you shop for a product offered by a company that you own stock in, you’ll be getting twice the value – in the product itself and by supporting the annual company earnings that your investment is counting on!