Issue 1 » Investing Made for Women!
But strong enough for men too!
Amy Smith of Investor’s Business Daily
Amy Smith is the work horse legend at IBD. She’s had a long run with her radio show How to Make Money in Stocks, and travels the world teaching in IBD’s workshops helping people master the art of investing in the stock market.
Amy is a prodigy who trained under the legendary William O’Neil, one of the legendary investors of all time, right up there with Warren Buffet. William O’Neil is founder of Investor’s Business Daily and The William O’Neil Co. His book How to Make Money in Stocks has sold millions of copies around the world.
3W: Amy why is teaching people how to invest in the market such a passion for you?
Amy: I’ve learned so much about the market through being at IBD, working with IBD Founder and Chairman Bill O’Neil, doing videos and doing the How to Make Money in Stocks Investing Show, and speaking to hundreds of investor’s over the years. Helping other people navigate the market is very important to me. If I see the light bulb go off and they begin to understand the market a little better, it really thrills me.
3W: How do women’s investing needs differ from men’s?
Amy: Women make many financial decisions these days and are equal partners in the family budget. Since many women have full time jobs while juggling raising children and taking care of the house, it makes sense that they are as much a part of their financial planning as men.
Women will live longer than men, so they need to plan for that. Frankly, women tend to make better investors than men. Bill O’Neil has joked about this, and said that sometimes men will allow their ego’s to get in the way. Women tend to follow rules better.
3W: Can I buy some big blue chips and just let them ride for decades?
Amy: Buy and hold is not something we recommend at IBD. A great company can still be great, but the stock’s price can fall dramatically over the course of 10 or 20 years. Some examples of big winners this year are: Amazon + 43% in 5 months, Ulta Beauty + 51% in 5 months, Twilio + 73% in just 2 months. Following the general trend is important since 3 out of 4 stocks will move with the general trend in the market. Investing in liquid names is safer. These are stocks that trade over 1 million in average daily volume. Studying big winners from the past is also a great way of learning what to look for in the next big super stock.
Apple, Google, Netflix, Green Mountain Coffee Roasters, Facebook – they all had products or services in big demand and were producing huge earnings numbers.
The number one rule is to keep your losses small, no more than 4-7% from what you paid for a stock. Let your winners run. Look for big volume as the stock is moving up in price, that shows that the institutional investor is buying shares.
3W: What is on your mind in 2017 – fears, hopes, realities?
Amy: A Trump victory means the following industry groups are more likely to succeed: Energy, Pipelines, Steel, Healthcare and Financials. Look for business to get a pop from a corporate tax cut.
Investors should always watch stocks during earnings season. That is when companies can make huge moves. But be sure not to invest prior to earnings. A strong earnings report and an upbeat forward looking guidance can really send a stock soaring though. And that coupled with a strong uptrend can give investors a nice boost in their portfolios.
3W: If someone has a large sum of money tucked away and is ready to invest what would you suggest.
Amy: Well they’ll probably want to engage in a professional money manager for their large sum, but they can certainly start off with a small amount and teach themselves to invest. You have to have rules on protecting yourself from loses and keeping your gains.
3W: Do people get emotionally tied in a company name vs. focusing on the company performance. Like someone favoring Apple the company vs. whether you should invest in that stock?
Amy: Investing psychology is the most critical part of investing. Greed and fear can cause mistakes. No matter how much you like a company you need to consult a chart that will tell you the truth about the stock.
A great routine is to pull up IBD and look at Big Picture, Stock Check Up, Leaderboard, read the news clips, and stocks on the move on the front page of investors.com and see what stocks are going up or down in volume. Look at the 50 day and 200 moving day average because that is when the professional investors come in to support their position and if they don’t the stock falls apart.
3W: Is there ever a time in life when it’s too late to learn to invest in the market on your own?
Amy: One of the worst mistakes is to not get started at all. If you don’t swing the bat, you can’t hit the ball. Read a few good books. My book, How to Make Money in Stocks Success Stories?, has good tips for newer and more experienced investors. Anyone can attend my workshops or feel free to contact me. Just get started small and build your confidence from there.