As a child, I would trade a dollar bill for almost anything I wanted, whether that was a doll, earrings or a friend's toy I desired. Most children, just like me, don't have a sense of the importance of money. Because they are unaware of the value, they are more forgiving about losing a dollar or two. Children also think simply. Companies that children use every day are easy to understand and tend to succeed. Children don't look into biotech penny stocks or Brazilan farming companies, so their investments are not as big of a risk. They also have time. Time is the magic key to investing. Looking around, there are many early birds that don't voice their investing genius. Here is a story about a teenager that has been using his time to his advantage.
“I thought you had to go to New York and yell at people to get money. I was so mad because it cost so much to fly out there,” says Isak D, teenager investor, and quiz bowl enthusiast. Even as a 10-year-old the only barrier he felt preventing him from entering the stock market was paying for a plane ticket to get to Wall Street. In the rare case that losing money crossed his mind, he quickly pushed the thought away. “I am still a child so it’s not like my life is on the line.” There is another plus of starting young. Younger investors tend to have less to lose. Because you are not investing your life savings into a variety of companies, there is not as big of a threat or chance for one to freak out and sell. Because your life savings are not on the line, a mistake is just a mistake. With every mistake, one needs time to make up and learn from it.
Not worrying too much about the money, Isak took a leap of faith in the stock market of Southeast Asia and Africa. He was intrigued by the world’s emerging markets because of, “their potential to grow explosively and provide a massive return on investment if you’re patient.” His interest in investing triggered him to buy mutual funds all around the world. But he had to learn the importance of patience.
Four years after becoming a shareholder, he sold his shares of his African Mutual Fund and is watching his Southeast Asian Mutual Fund rebound from a heartbreaking drop. But Isak is far from discouraged from his losses, he continues to track emerging markets and learn from his mistakes.
Still amazed that he didn't have to pay for a direct flight to New York, Isak bought a few shares of Berkshire Hathaway (BRK.B). After waiting for almost two months for the company to drop to his desired price, he decided to pounce on the chance of becoming a shareholder. Now he is planning on going to the famous Berkshire Hathaway annual meeting (not just for the Coca-Cola).
With his investment path paved for the years to come, Isak will continue to watch his stocks rise and fall without becoming too fearful.
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