5 Things First-Time Investors Need to Know

 Stockpile Lucky Store Display

Guest Piece by Dan Schatt, CCO of Stockpile

You’ve finally decided to take the plunge and invest in the market. Here are five important things you should consider when investing in the market for the very first time:

  1. Take the long view:Despite booms and busts, remember that over the last 100+ years, the stock market has historically performed better than bonds and real estate, and certainly better than cash sitting in a bank account. $1,000 invested in 1900 would have been worth close to $20 million in 1999! A 10+ year time horizon can help you keep perspective and weather the ups and downs of the market.
  2. Invest at your comfort level: If you’re considering an investment in the stock market, make sure you’re only putting in an amount that you can afford to lose. Remember, that during one week in September 2008, the market plunged 18 percent and on Black Monday of 1987, the market fell more than 22 percent in a single day.
  3. Diversify your investments: It’s tempting to put all your money in one investment, but diversification is an important principle in any portfolio you decide to build.  Not sure which set of companies are right for you? Consider an investment in an index fund, such as the S&P 500. This allows an investor to have exposure to a wide variety of the largest stocks.
  4. Actively follow your investments: Have you invested in individual companies? If you have, you should follow the news as well as the quarterly and annual reports of these companies, which are all available online. You can also listen in on the earnings calls of these companies and hear how management teams respond to some of the hard-hitting questions asked by professional investors. You’ll learn a lot in the process and it will help you hone your investment skills and help you in your future investment decisions.
  5. Invest as consistently as you can: Nobody really knows what will happen in the future – it’s very hard to be successful by timing the markets. If you can set aside 10 percent regularly from your paycheck for investment, you’ll be way ahead of most people and that cushion will add up over time.

It has never been as easy and affordable to access the stock market as it is today. At Stockpile, we’re seeing many first-time investors join us since anyone can now buy any dollar amount of stock on our platform.

Stockpile.com lets people invest as little as $1 in the market. This makes it easier to invest at a comfort level that’s right for you – a 10 percent loss on a $1 investment is just ten cents.

At Stockpile, we provide access to indices through exchange traded funds (ETFs) and there are many to choose – from country specific ETFs such as a China or Brazil Index to commodity ETFs such as gold.

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About Stockpile:

Leading the consumerization of stock, Stockpile offers investors an easier and more affordable way to start investing. Available online or via smartphone, stock can be purchased in affordable denominations (as low as $1) through offering fractional shares.

The company also offers the world’s first gift card for stock, making it easier to gift stock to family or friends, popular for graduations, weddings, baby gifts and the holidays.  The gift cards are available at 14,000 grocery and retail locations across the country, including Kroger, Target, Safeway/Albertsons, Wegman’s, Giant Eagle, SuperValu, Hy-Vee, Save Mart, OfficeMax, Office Depot, Kmart, Buehlers and Supervalu.

Co-Founder Avi Lele is a dad who came up with the idea when he couldn’t find an easy and affordable way to gift stock to his kids, nieces and nephews a few holiday seasons ago.

“Most people have never had an opportunity to own stock in their favorite companies because it’s too expensive and complicated to get started,” says Avi Lele, founder and CEO of Stockpile. “You can’t do anything with $25 at a traditional brokerage. Stockpile removes those barriers by using fractional shares and bringing the stock market to you. For the first time ever, you’re able to walk into the supermarket and buy a gift card for, say, $25 of Apple stock right off the rack. Buy it for yourself or as a gift for family and friends.”

With a thousand different stocks, ETFs, and ADRs to choose from, investors can buy or give the exact dollar amount they want. Stockpile allows customers to give via physical gift card or e-gift, allows users to redeem rewards points for stock, or turn existing gift cards into stock.

Once a stock is purchased or redeemed via gift card, the stockholder receives a fractional share of the stock in a real brokerage account that will go up and down with the market. Stockholders can hold on to the stock and track its progress, buy more of the stock or other stocks, or cash out of the stock by selling it whenever they want.

“Stockpile is partnering with companies and nonprofits who care about financial literacy and empowerment and want to make stock and ETFs accessible to everyone,” said Dan Schatt, Chief Commercial Officer at Stockpile. “Local credit unions to Fortune 500 companies are leveraging Stockpile’s platform — whether it’s to offer a brand new set of gifting services, a differentiated loyalty program, or an innovative employee incentives and recognition plan. They also get a new way to communicate more personally with their retail shareholders.”

Stockpile, which has secured $15 million in funding, is backed by an all-star team of advisors, including  Don Kingsborough (founder and former CEO of Blackhawk Network) and Melanie Healey (former President of North America for Procter & Gamble), and notable  investors, such as  Ashton Kutcher (actor, entrepreneur and tech investor).

How Stockpile is revolutionizing access to the stock market:

  • Buy it by the dollar online. Buy any dollar amount of stock for yourself, or give any amount up to $1000 as an e-gift.
  • Buy them in stores. Stockpile gift cards are available nationwide in select supermarkets and retail chains (in $25, $50 and $100 denominations).
  • Get fractional shares of real stock. If you redeem a $50 gift card and Disney is trading at $100 a share, you get half a share.
  • Purchase in 2 minutes. Use a credit or debit card to purchase Stockpile gift cards at Stockpile.com or download the iPhone app.
  • Any age. Even kids and teens can own stock with an adult on the account with them. In fact, 60% of Stockpile’s user base is under 30 and 30% are kids and teens (through custodial accounts).
  • Free switching. Gift card recipients can redeem their Stockpile gift card for the stock on the card, a different stock, or even a merchant gift card.

About the author: Dan Schatt is the CCO of Stockpile (www.stockpile.com) a company whose mission is to make the stock market accessible to everyone in an easy and affordable way.

*Photos courtesy of Stockpile



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