Investing 3
When I was in high school my father gave me a thousand dollars to invest in the stock market. He told me that whatever money I made over and above the thousand dollars I could keep. But if I ended up losing money, he said I’d have to pay him back. I agreed to the deal. I didn’t know much about investing at the time, but for obvious reasons I was determined to learn. I read a number of financial publications and learned as much as I could. Most of these magazines concerned themselves with what they called “hot stocks.” These were stocks that were poised to double, perhaps even triple in price in the next few months. The magazines also warned that investing in these stocks could be extremely risky. But, as an impetuous, overly-confident teenager, I decided to roll the dice.
It only took about a month before I had lost nearly all the money. All of the stocks I had invested in performed well for a few days then went directly into the toilet. With my tail between my legs and my eyes on the floor, I handed my father a check for the remainder of the thousand dollars, which came out to exactly one hundred and twelve dollars and eighty-seven cents.
My father didn’t frown or smile or start to shout, he simply shook his head and made me another offer.
“I’ll tell you what, son,” he said, “if you can tell me what you learned about investing from our little experiment, we’ll call it even.”
I smiled and said, “I learned I’m not very good at it.”
He shook his head sternly and told me I’d have to dig deeper than that.
After a gravid pause, I responded that I had learned that investing is not a game and that it was easy to get burned if you didn’t know what you were doing.
He smiled, nodded his head and said, “What else?”
I told him I wasn’t sure but that slow and steady most likely won the race, and that investing for the long haul was probably the best bet.
“Good,” he said, and handed the check back to me. “Now, learn a bit about investing and choose a stock you know something about.
I followed my father’s advice and took the time to research the companies whose stock I was interested in before investing in them.
By the end of my senior year of high school my paltry one hundred and twelve dollars and eighty-seven cents had become over thirteen hundred bucks! I offered to repay my father for my failed investments but he told me to keep it. He told me the lesson was the most important thing and I had certainly learned it.
