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Shortly after my career as a financial analyst, I opened a stock brokerage account and bought my first two stocks for about $500. About 15 years have passed since those first investments, which gave me plenty of time to analyze and reflect on them. Here’s a closer look at my first stock market investments and what I learned along the way.
The short version
- My first two stock investments outside of a retirement account were Walmart and General Electric.
- Investing in stable chip stocks taught me that chip stocks are not necessarily the best investment.
- Overall, I wish I had invested more and held the stock longer in most cases.
My first investments after college
When I started my first corporate finance job early in my career, I was fortunate enough to have access to a pension plan in addition to a 401(k) match. But I knew I wanted to invest more. After using my dad as a sounding board, I opened my first taxable brokerage account and deposited $500.
As a recent finance graduate, I wanted to put my analytical and training skills to good use. I decided that the first two individual stocks I bought would be relatively safe large stocks. I loaded the investment page and bought about $250 each of Walmart WMT and General Electric GE stock.
A look at the WMT and GE stock charts shows the economic ups and downs, management changes, spin-offs and other events of some of America’s largest and most storied companies. Here’s a closer look at the performance of these first two investments.
Read the blue cards >>> Blue-Chip Stocks Guide: Should You Buy During a Market Drop?
I sold my Walmart stock too soon
Walmart was the first stock I chose as an individual investment. My grandfather, who met Sam Walton personally, was an early investor in Walmart and provided great returns for his portfolio. I bought the stock in early 2008 when the price was around $50 per share. The stock offered a modest dividend and showed a strong growth track record, far outperforming rivals such as Target.
I picked this stock at an interesting time. Amazon was just beginning to show its potential as the newly dominant online retailer. Walmart mostly went up and down over the next decade. While I continued to receive my dividends, the stock seemed unable to break out above a certain price range.
About 10 years later, I had a terrible experience with Walmart’s first online pickup product. I decided Walmart probably couldn’t keep up with Amazon and sold for a modest profit.
In retrospect, however, Walmart figured out the online shopping system. And Walmart was one of the stock prices that rose during the pandemic. If I had held on, my investment would be worth much more today.
Read more about long-term retention >>> The good and bad of buy and hold
My instincts were right about General Electric
My second blue chip stock was General Electric (GE). GE traces its roots back to the invention of the light bulb. I was impressed by GE’s various business lines, including power plant manufacturing, jet engines, and a major financial unit.
If you’ve been following GE news for the past decade or so, you know it hasn’t been an easy ride. I bought the stock shortly before a serious drop in performance. GE’s financial business was a major victim of the financial crisis in 2007 and 2008. I saw the value of my GE stock plummet. But I held on for a while.
Eventually, I became bitter with the company because it didn’t seem able to recover from competitive and management challenges. I sold as the stock was rising again before another drop. I ended up with a modest loss.
But looking at how GE has performed since then, I made a good decision to sell. The stock price remains below where I bought it in my 20s.
Read more >>> Buying and selling shares — Guide 2022
What I learned from my first two actions
Looking back, I made the best investment decisions I could with the information I had at the time. I do not regret my decision to invest in these two companies. But like a sports team re-watching old games, I can learn a lot from looking back on my early investments.
My purchase of stable blue chip stocks made sense. However, because I was so early in my career, I could have bought stocks with a little more risk and potential. While Walmart and GE were stable companies with what I believed to be relatively low risk, both experienced ups and downs and mixed long-term results.
If I could go back knowing what I know now, I might have bought more Walmart to last longer and skipped GE. But that would have meant my portfolio was less diverse, which is not a good way to manage risk. So I’m pretty proud of the thought process that led to these first two stocks in my portfolio.
It would also tell me that I would invest more in general on a regular basis.
Putting a little more into my 401(k) and other investment accounts means I would have had more today.
In the long run, my diverse portfolio has performed very well.
Read more about retirement >>> Average Retirement Savings by Age: Are You Keeping Up?
Bottom line: You win and you lose, but you always learn
No investor is perfect. There will always be winners and losers. These days, I keep about 80% of my assets in low-cost ETFs for retirement, about 15% in individual stocks, and 5% in riskier alternatives.
If I could go back, I would advise buying all the Amazon stock I could when it was cheap. But since I don’t have access to the time machine since Back to the futureI will have to look back and take the early investment lessons to heart for future decisions.
My biggest tip for myself is this: buy more stocks and ETFs and hold them longer. Overall, this would have given me the best results.
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