If 2020 was a motto, it would be fool me once shame on you, fool me twice shame on me.
I graduated right when the 2009 Great Recession started, into essentially a non-existent job market and the worst year of my life. The past 10 years were a grueling process to heal mentally and financially.
So, imagine my PTSD when coronavirus shows up ten years later and takes blowing up the economy to another level. As blindsided as we all were, I had my wits about me this time. I wasn’t gonna let history repeat itself. At least not my financial history.
That’s the context for why I started my investing in a recession challenge. Around March I started dedicating at least four hours a day to following the stock market, buying up at discounts, and consuming as much knowledge as possible on how to invest and make a profit.
I’m making videos occasionally here, but I felt the need to talk about Disney, the stock on everyone’s mind.
Disney is like milk— you know when things are good or out of hand as the price goes up or down.
You got to inverse your thinking, though, when it comes to stocks, because even as they get cheaper for the average person to buy, they also get more expensive if they lose their value. Buying cheap milk is great for the soccer mom, horrible for the milk farmer. But if the whole milk supply goes sour none of us are eating cereal.
Disney is supposed to be the safest bet because there’s no reason for it not to grow in value.
First, Disney invented the happiest place on Earth.
Also, it’s hard to find anyone who doesn’t own at least one Disney DVD (VHS if you’re a real OG) that their four-year-old self didn’t wear out. And now, Disney has a streaming platform where you can binge to your inner child’s delight.This content is available only to subscribers. Sign up now to continue reading.
Out of all its products/services, Disney makes the most from its media and entertainment vs. its theme parks (check out page 2, segment operating income). So technically speaking, it should be a no-brainer to invest in its stock. It can still earn a good amount of money even though social distancing is keeping Disneyland closed for who knows how long.
But lately, Disney’s not the cash cow most people hoped for. So far I bought it at a profit, albeit only a $10/stock profit over the past month. It’s staying in the same place right now, not going down or any higher in price, and for that reason some experts are telling us to cut our losses and sell it off.
I’d only do that if I were going to take the cash (i.e. profit) from sold shares to buy another stock without it costing me any more money. In other words, I’d use the profit I managed to gain from Disney and use it to buy something else I knew is (a) at a discount, and (b) expected to grow in value and make me money without having to take more cash from my bank account.
Big BUT— this is based on the way my specific portfolio is made up. Based on the performance of the other stocks I bought, selling off Disney wouldn’t mean much. I wouldn’t gain much nor lose anything. It would only be worth it to me if it gets me to another stock that will make me more money, faster and sooner.
This is why it’s so important, especially as a novice, not to just follow whatever “the experts”, or anyone else, says. There’s been so much value in me learning for myself, and not just trusting a financial planner to do the work for me. Yes, it takes a lot of time and my mind was never equipped to look at so many numbers every day. But I feel way more empowered to know what I’m doing and be in control of my own finances.
And I hope you’d do the same. 2020 is turning into a year of controlling your own destiny, as much as that’s possible. As a woman, I’m finding the confidence to take these risks and make something out of a situation that would have made me an emotional hot mess a decade ago. As a black/African woman, I feel I’m making up for lost time and wisdom about building wealth. And for the first time, I feel I’m on the right path to create something I’ll pass down to generations.
Maybe you want to feel the same way? Let me know if you want more ideas or just want to watch my financial journey by signing up to get blog post alerts. If you’re really lost and have specific questions you want to read about or hear me discuss, send an email to firstname.lastname@example.org
DISCLAIMER: The Investing Series focuses on investing in the U.S. stock market. I have a Master’s degree in International Management, but I am NOT a certified broker or trader. The advice I give is based on my own experience and I cannot be held liable for any gains or losses from this advice!