FrugalJim

Since the wife made her decision to not go back to work, my savings account has been growing.  This cash is sitting in an account that is currently yielding around 4%.  That’s not bad, but I would like to make it grow faster.   To do this, I will be looking to do some trading in the stock market.

While this is definitely more risky, especially compared to the savings account, I feel the risk is worth it.  To attain my goal of saving $35,000, it will take over two years if I just get 4% for my money.  This time could be significantly lowered by making some good decisions with certain stocks to buy.  And if I make stupid mistakes, or the market behaves badly overall, I will not be devastated by losing some money.

I think I will start using this blog to track my performance as well as a feedback mechanism for evaluating my decisions.  Even if no one else reads this, I’ll at least have to put my rationale for trading decisions down to paper and be held accountable for them.

In the past, I’ve made investing decisions, and then bailed out on them when I got scared.  This led to significantly lower performance.  Hopefully that won’t happen this time.

To start off with, last week I made two buys.  I bought an foreign market ETF (Exchange Traded Fund), IShares EFA.  This stock consists of European, Asian, and other Far East stocks, and tracks a index called MSCI EAFE.  I bought it because I think the foreign markets are irrationally down due to the thought that the US is entering a recession.  I plan to keep it until it makes 10% or it stays in my portfolio for 90 days.  I paid $68.70 per share and bought 14 shares.

The other purchase I made was Bank of America.  This stock got hammered last quarter because of the mortgage mess that is going on.  Long term though, I think it will be able to pull out of it, and the wife and I both really like doing business with them.  I bought 23 shares for $42.25 each.  I plan on keeping this until it reaches 10% or 90 days.

Here is a rundown of my holdings:

This entry was posted on Thursday, February 14th, 2008 at 6:12 am and is filed under stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.