Our First Investment
Housekeping
I think I will do a end of month post that shares what we bought, why we bought it and also how things are going for the month. Then I might do some mid-month posts that have other info or things on my mind, but I believe I will commit to the end of month update and hopefully have time and focus to do a middle of the month post too.
(and why the photo for this post – well I, sadly, will admit that I was looking forward to reading Mr Buffett’s annual letter – and hopefully after a few months, you will know who he is and why he is a pretty awesome nonagenarian)
Month end Pre-amble
I may be able to beat the general market – but I may not. So, we do this for a year and we can see how it pans out. Either way, the main focus is on saving so that will be a tick no matter what, however we may change direction after 6-12 months. One school of thought says we should have money in a simple basket of shares that track the overall market – like on the news at night, they refer to the Dow Jones index or the Nasdaq in the States – which look at the overall general market performance and the tech market respectively. In Australia, the news item will show how the all ordinaries index (the Aussie dow – sort of) or the ASX 200 (top 200 Aussie companies) is performing. It would be easy to buy the index or some sort of basket of shares that track that number – like a ETF or Exchange Traded Fund.
The above is a very very very sensible approach because to do otherwise, you would blow some of your savings in fees to someone who picks the stocks and manages things for you. And there is a strong argument that for your money, you often get a poorer result when all the fees and costs etc are taken into account.
I humbly believe that I am better than almost everyone else (born blonde with blue eyes – just sayin’) and I won’t be charging fees – but this stuff, in all seriousness, is very hard to get right so let’s see. If after 12 months, we realise we haven’t done much better than the broader market – then we will have still succeeded but if we do get beaten by average and boring, then we have learnt a lot that can be put into practice via a low cost super fund and we will all have saved a bit of money and had a giggle along the way, pretty well entirely at my expense.
So, for the next 12 months, as a test of this approach, we will be buying around $1,200 worth of stock a month – and given we don’t want to own more than around 10% in any one stock, that means we buy one stock per month – well that’s what I have chosen for us.
What and Why
We are now all proud owners of Apple stock. That way, we can all feel that little bit better about buying Apple gear and paying for Apple subscriptions. And we hope to continue making money as Apple continues to be more valuable.
Why did we do that? Well, first of all, Apple stock dipped a bit the last few days so it looked like good buying right now – but in a broader sense, I still think that even though Apple has increased in share value a ridiculous amount over the last couple of years, they are still in a healthy and well placed position to keep making more money and locking in more customers. They have been able to pivot from a hardware manufacturer that gets X dollars very time they sell Y phones to a company that has excellent vertical integration (they make the chips and then the phones the chips go in and they own the stores you buy them from etc) BUT more importantly, they have developed a growing subscription based revenue stream so if phone sales drop a bit, it doesn’t knock them around as much. Subscription grew from iCloud storage to Music to TV to Fitness – which a guru I follow refers to as a RUNDLE – which is a recurring revenue bundle. Rundles are good – and Apple should be good for us.
How we have gone
We have immediately lost money. We have about $1 less than when we started. I trust you are loving it so far. I am.
Trust me.
Your SVP.