I recently came across an idea on the website “Couple Money” in which Elle hosts a Sunday blogger series each week, designed to promote the personal finance community and highlight other professional sites.  I’m proud to say I’m the featured guest today, so check it out.

The Sunday Stock Exchange

This great idea got me thinking… one benefit of this site is the community of investors (and those curious about investing) who visit here on a regular basis.  So, I decided to develop “The Sunday Stock Exchange” idea… a forum for investors and those interested in investing to share ideas on their perspectives on investing.

Hank Coleman

Today, is the inaugural post… and I’m pleased to introduce to you Hank Coleman of Moneyqanda.com.  I borrowed from Elle a little and composed several questions to help keep some consistency between contributors… let’s see what Hank had to say in response.

Introduction… when did you start trading/investing in the markets and why?

My name is Hank Coleman, and I have been a personal finance blogger for over three years now. I write about all types of personal finance topics such as investing, retirement, savings, debt, insurance, estate planning, and other subjects on my personal finance blog, Money Q&A. Unlike many personal finance bloggers, I didn’t start out writing about conquering a mountain of credit card debt after college that you see all too often from many general finance bloggers. I have actually always loved anything to do with the world of business, investing, and personal finance since watching the movie, The Secret Of My Success with Michael J. Fox, as a kid. I always knew that I wanted to do something with business and investing. So, I went to college and earned a Bachelors Degree in Business and then a Masters in Finance, and ultimately writing about personal finance on my blog and other websites encouraged me to begin studying for my Certified Financial Planner credentials as well. I have a passion for trying to help people with their money problems and answering all types of money questions.

I started investing primarily in stocks and mutual funds right after graduating from college. I’ve always classified myself as an investor and not a trader. I have a steadfast love for the buy and hold mentality and dollar cost averaging. I have always viewed myself as a contrarian type of investor looking for unfairly beat up stocks at great values to scoop up and hold for as long as it takes to earn a great profit. I am 31 years-old and have the benefit of decades before needing any of my investments for retirement. And, since I invest primarily for retirement, I have the great luxury of not worrying so much about the stock market’s short-term moves. I’ve always considered a trader as someone who has a very short-term outlook on his or her investing and an investor as someone who is in an investment for a long-term, typically one year or more, time horizon. I love being an investor and not a trader. It helps me take a little bit more risk with my asset allocation and sleep better at night.

What are three trading/investing myths and how would you refute them?

“Buy and hold investing is dead.” Buy and hold does not mean buy and hold forever without selling. Buy and hold investing is a long-term investing strategy that can and does have an end target in mind. It is not an open ended endeavor where you will never sell your shares of a stock or a mutual fund. You should have clear objectives when you purchase shares of a stock or mutual fund, and you should know what type of criteria will trigger you selling. Since I am a buy and hold investor, I look for stocks to purchase over the long term, but I have a clear idea of when I would like to sell them as well such as a dramatic change in management philosophy, 10% or more capital gain, etc.

“You can’t invest until you are debt free.” Financial experts like Dave Ramsey have continually spread the popularity of this myth for a long time. I can see their points to a certain degree, but their way of thinking is not the only way. Like so many things in life, there are different ways of getting to the end result that you are after. There is not one set path to success. I’m a big fan of continuing or starting to invest as soon as you land your first job whether you have debt or not. Of course, you should work hard to pay off your debt and never go back, but it is very important to start investing and earning compounding interest as soon as possible. Waiting is not the answer.

I am a huge fan of dividend reinvestment plans (DRIPs). Many of the recent purchases that I have made have been dollar cost averaging each month into large blue chip stocks that offer excellent dividend yields. Some of my favorite stocks recently have been McDonalds (MCD) and Dr. Pepper Snapple Group (DPS). Both have great dividend yields, history of increasing their dividends, DRIP programs, and strong stability even in the current rocky stock market that we have seen lately. Like Warren Buffett, I love to buy shares of stocks in companies that I know and understand. There are so many great ideas for stocks to purchase by just looking at the products my family and I use every day.

What advice would you offer to other investors?

The best piece of advice that I would give people is to start investing as early as possible. Far too many people who have just graduated college, entered the workforce, or are in their twenties or thirties wait too late to start investing. Many of my coworkers do not have a single dollar saved and invested towards retirement. They think that they should get on their feet first, purchase a house, or have some other idea of why investing should be several rungs down on their priority list. Investing, especially for retirement, should be near the top of everyone’s priority list. Many people, especially young people, do not think that they have enough money left over in their budgets to invest with. The real problem is that they do not pay themselves first. Investing should be one of the first things that is allocated in your budget, especially investing for retirement.

Thanks Hank…

What do you think of Hank’s thoughts?  Do you see investing in the same way, or would you make some adjustments to the ideas presented?  Please join in the discussion and tell Hank (and I) what you think of his ideas… then plan on participating yourself in future weeks by sending me an email.

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