Thursday, July 5, 2007

Beginner's Luck

I'm using a retirement account, a rollover IRA from a previous employer with about $12,000 as my 'play money' to learn about investing on the individual stock level. My justification for this was really threefold:
  1. It doesn't feel like "real money" since I can't withdraw it for another 45 years. This means I'm not as risk averse with it, because the time horizon is so big.
  2. Since it's a tax advantaged account, I don't have to worry about the tax implications of my actions. One less thing for me to worry about while I'm learning.
  3. It's just enough money that I can pick a few stocks and see what happens, but not so much that I'd be ruined forever if I lost it all.
So far it seems like a great way to get my feet wet a little and decide if this whole stock picking game is for me. Although maybe it seems that way because I'm up 8% over 2 months and have my very experienced investor father taking my stock tips. Maybe I'll be singing a different tune when the beginner's luck runs out? Just in case I'm keeping my other money in mutual funds, ETFs, and plain old high yield savings for now.

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