Updated: Jan 31, 2021
One of the things I know about myself is I like to tinker with my investments. There’s no way that I could simply just put money into VTSAX and forget it. Would I be better off over the long run if I did? Most likely. But I know if I even started to implement that strategy I’d blow it up in the first month.
There's a lot of psychology involved in investing. The more you know about your own behaviors, the more you can put up guardrails to prevent yourself from doing dumb shit.
WTF is a Fun Investment?
I'm not referring to alternate investments here. I make sizable investments outside of the stock market such as music royalties, heavy metal bands and real estate. Sure those are fun investments to make, but I take them extremely serious so they're not trivial. It's also a decent amount of money tied up into them, so their results are impactful.
No, what I'm referring to is a little money set aside to "gamble" on individual company stock. Play the market. Roll the dice. You know, pick the winners and sell the losers of course! Time the market of course!
I have an account with SoFi (affiliate link) that I use to make these smaller individual stock plays. I don't do all of the options craziness like the kids over at Wall Street Bets. I've not hit that level of comfort with risk, and never will. No, I'm just talking about regular stock purchases. Regular "I think I'm smarter than the market" type of stock purchase and sell orders.
To be clear it doesn't matter that these investments are smaller dollar amounts. I hate to lose. I'm not afraid to lose...I fucking hate it! So even though these are smaller investments, when they show red I feel red. Inversely when they are green I feel a rush! Is that a dopamine hit I'm feeling there? Not sure, but I like it, I love it, I want some more of it.
By focusing on these investments, and watching how they perform during the trading day, I am able to ignore my other larger investments. This helps because I'm hardly ever tempted to make a spur of the moment sell or buy decision. These larger investments are there to do a job, over the long haul. Short term fluctuations mean nothing.
Basically these smaller investments are my shiny object that keeps me entertained while the real meat of my portfolio hums along.
So what does this look like in detail?
Let me give you an example.
Real World Example:
Last week I heard a rumor about a special purpose acquisition company SPAC who may be interested in a green energy related company. The rumor is that this SPAC and this green energy company should be making a merger announcement any day now. I actually found out about this green energy company because they were recruiting me for a leadership position there. Did some research on them which is how I found out about this rumor.
I'm not giving the details here because:
I don't want to feed the rumor machine, I'm not into pumping risky stocks
Chances are good this will not age well
Anyway, so I put a grand total of $422.97 into this SPAC stock last week. This amount represents .05% of my total portfolio. I'd have to 20x this investment to reach a total of 1% of my portfolio. So this amount means nothing in the grand scheme of things.
That being said this investment went up 21.53% in 2 days! I was checking the stock pretty much every hour or so during the day. I have no idea how the overall market did during this time, I only cared about this stock. That's the point of these fun investments for me.
At the end of the day these little investments allow me to let the majority of my investment portfolio do its job without my interference. I'm never going to be smarter than the market so I'll let the market do its job without me.
Next week I'll probably find a new stock to play around with a bit. I'll never put anything beyond a portfolio rounding error into these type of stock plays however.
I'm just catering to the kitty cat in me.
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Personal Capital: My go to place for tracking all things Net Worth.
YNAB: My go to place for managing my spending and budget.
Betterment: I use this account for general investment purposes.
M1 Finance: I use them for my dividend stock investments.
SoFi Invest: This is where I make individual stock investments.