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The Beginvestor: Picking and Buying the First Stock
Posted on January 15, 2018 by Danielle Bilbruck

This blog is part of a new Stocks for the Week series called The Beginvestor, catered specifically for people who are new to the investing world and want to understand the ins and outs of the market. The Beginvestor is written by Danielle Bilbruck, a novice investor herself, who will be covering her own investing education in detail as she goes and documenting it for this series.

I’ll be honest, this was a tough piece to write.

Not because I didn’t have stocks in mind. I had plenty of them that I wanted to look at: Intel (INTL), Twitter (TWTR), and Facebook (FB), among others. I wanted to stick on the tech side, but it looked like everything was either out of my budget for my first stock ($100+) or the Stocks for the Week Investor app told me to hold off. The first day that I saw Intel move to “Buy,” I got excited and logged on to my Robinhood app to snatch it up…only to find that they needed to take a week to verify my bank account.

A week? Didn’t they know I was on a deadline?

Anyhow, it took several more steps than I had planned. Once I finally got my bank account verified, I sat down to look through stocks like Goldilocks: too expensive, too volatile, too unknown an industry for me…it was a little bit harder than I thought it would be to come up with companies I wanted to search. I checked my watchlists that I had put together, both the Beginvestor and the Popular Stocks watchlists, for reference. I went into the Robinhood app and looked at their list of recommendations–stocks either in green or red font to indicate that they were either on the up- or downswing–and then would cross-reference them on the Investor app to be sure. Everything I could see on the upswing in Robinhood ended up being a “Hold” in the SFTW Investor app. While it was frustrating (I didn’t think I could become so frustrated over a mostly imaginary concept like the market), I reminded myself that this also meant that I could put these “Hold” stocks on my watchlist for future reference as well.

I finally went to the Investor app dashboard and looked at “Today’s Recommendations.” There are three lists: the top daily recommendations, the top overvalued stocks, and the top undervalued stocks. The second list was just a couple of stocks that were being recommended to sell, and the third list was a long list of stocks doing well that we should keep an eye on. I was at dinner looking through them the first time and commented to the people in my party that I had no idea that Texas Roadhouse and Cracker Barrel stocks would be so high ($50+ and $100+, respectively.) It just goes to show that we should get rid of our bias when we’re stock-picking: Just because I don’t like Texas Roadhouse food doesn’t mean they’re not a smart investment, right?

Finally, I picked a name I knew well: Hewlett-Packard (HPE). The safety score was not great (29, yikes), but I’ll be honest, I am not even sure what that means in relation to it being a recommended stock, which is probably its own future blog idea. But I knew the name well, I knew the industry well, the price point was inside my budget ($14.61; I was willing to go up to $50, but no more than that for a first stock,) and I needed to pick a stock and actually write about the thing, so I pulled the trigger.

All things considered, actually buying the stock was a lot less time-consuming than considering which stock to buy. I logged into my Robinhood app, looked up HPE, and found the profile.

This particular profile looks at the life of the stock over the course of the day, as well as the price of the stock per share. I only looked at this particular graph, and not the others, because I wanted to get through the actual process of buying the stock so I could see, soup-to-nuts, how the process worked.

This was a really easy part. While this is a really reasonable price for stock I might buy as a beginner, I still knew that the goal was to buy one share just to see how things went. I plugged in the amount I wanted, swiped up to submit, and then the app threw a party for me: I was now the proud owner of, well, stock.

To be candid, when I do it all over again, I would like to do a couple of things differently, to include doing a little more research on the stock itself. I know that I have a tendency to overanalyze and can probably research something to death; it seems to take away the feeling of urgency associated with the trading floor, but if I’m really going to do this, I do really want to feel like I understand what I’m looking at. The next time around, I will look at the rest of the graphs in Robinhood and try to understand more about the actual Investor app and what all the things that aren’t “Dividend Yield” actually mean. In my next blog, I plan on a deep dive into the Investor app; after all, I can’t make an educated decision about stock-picking if I’m not entirely sure what all the numbers mean, right? Meanwhile, I’ll continue to watch the stock performance and see if I become a millionaire overnight.

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Written by Danielle Bilbruck

 
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