Part of this process is to establish an audited track record. I am beginning that process by using covestor.com .
Covestor is a 2007 startup that allows members to create audited track records of their trades, allowing them to gain recognition (and in the future earn fees from their recommendations). The site allows members to track others' performance and follow the trades that they make. Membership to Covestor is free.
You can record your trades on the site manually after you make them, or you can "auto-confirm" trades via a download from your brokerage (extremely cool), which will then update the Covestor site about 15 minutes after you trade (they work with most of the major brokerages). The connection to your brokerage is secure; Covestor works with Yodlee (a major provider of data aggregation technology) to create a "one-way" view of your data.
Your identity and individual data can remain private; also, Covestor 'normalizes' your investments so that people are seeing scaled trades instead of actual amounts (they do label your account as a 'small', 'medium', or 'large' account however for purposes of tracking). You can also choose whether to allow your picks to be accessed by anyone on the web, or by members only. Good stuff.
More about Covestor: http://www.covestor.com/about/news
To start my track record, I am starting with a couple of small IRAs: my IRA and my wife's IRA. This is an active trader account -- trades held anywhere between 2 to 10 days. The represents about 10% of active trading assets. You see the Covestor widget on the right hand side of the blog -- click to see my performance. This account is very aggressive and has wild fluctuations in account equity -- it is not representative of my investment results (whether it is doing well or not).
I plan to add my more traditional investment accounts and larger accounts later. But I needed to start somewhere.
My track record for my IRA trading account: My Track Record
Saturday, December 15, 2007
Saturday, December 1, 2007
Why This Blog?
As I strive to become a better investor, trader, and financial expert, I anticipate several needs that this blog may be able to help address:
- A need to journal my trades. If I am going to become a better trader, I need to write down my trades and my rationale. That way I am accountable and I am forced to reflect on my learnings and mistakes. Creating this blog is the beginning of that process -- it provides a very convenient vehicle for creating a journal by day, and to do it in a more public way (the accountability part!).
- A need to crystallize my ideas and thoughts. As I read and experiment, I find that have all kinds of ideas that I need to get down in writing -- what looks interesting, what I might give a try, what ideas might I need to test further, where the resources are that might help me....many times I find if I don't get them down, some of them just vanish into thin air (especially the older I get).
- A potential way to build credibility. I don't know where this journey will take me -- I am hopeful I will continue to become more effective in managing my own investments well, but there is the possibility of going beyond that -- if I ever am going to take a more "public" path -- perhaps become a financial planner, investment adviser, or financial writer, I will need to be able to effectively and lucidly express my strategies in order to establish credibility with others.
- Giving others ideas. I have spent a lot of time reading and researching ideas to make outsized rates of return. I would like for others to get the benefits of my own insights -- especially those who are newer and might be following along (empathy!!!) -- maybe I can suggest strategies, investments, reading material, websites, and/or other resources to help others get an edge.
Next: another thing I have a high degree of urgency around is establishing an audited track record. I'll talk more about that in the next entry.
Thursday, November 1, 2007
Leaving the Rat Race to Trade
You want to do WHAT?
In 2006, the time had come. After nearly 20 years in my industry, at the age of 42 -- I was seriously considering leaving my job in corporate America in what was one of the more challenging decisions I have ever made. A month later, after careful consideration, it was done: I would retire and leave the rat race in the middle of the year. No more working for "the man".
There were a lot of reactions from the people I told -- many reacted in amazement, some thought I must have a secret job lined up (can we join you?), some thought I must have been fired (management layoff, scandal perhaps?), maybe I'd just gone off the deep end (like I hadn't heard that before). After all, over the last 18 years, I had rapidly worked my way through the ranks, became a partner in the business....and through the rapid growth of the company and my own advancement, I found myself managing the second largest regional office of a Fortune 1000 company -- and the world's largest human resources consulting and outsourcing firms. I was the operations head of a group of over 2,000 employees.
Then as I explained what I was thinking to others, the conversation got into: "Don't be ridiculous. Why in the *** would you give up your job -- who leaves a job like that? What are you thinking--have you really thought it through? Do you have enough money? What does your wife and your family think? Do you really know what you are doing? You realize you've been in management a long time -- do you have any real world skills? What if you change your mind? Are you really going to leave behind us and the people you work with?" I will admit these were darned good questions...I was not really sure the answers to all of them, and I was certainly dazed and confused.
What I was sure of....was that I was mentally and emotionally tired. Tired of the long hours and the pressure. Tired of answering to corporate on minutiae and spending time on "administrivia" that did not benefit my clients. Tired of having to 'reorganize' and 'downsize' to squeeze out as much money as possible for short-term thinkers. As much autonomy as I had (after all I was the boss!), I felt trapped, not intellectually stimulated.
What's interesting is that I had remembered reading a book during the late 90's about a former Peat Marwick audit partner that had done "bare bones" retirement at age 35 -- he and his wife decided to downsize and travel the world. While I wasn't quite in the same financial conundrum, I did find a lot of parallels as I went back and re-read it (if you're interested : Cashing In on The American Dream , by Paul Terhorst). It was very motivating because it validated for me that I could leave a "good" job in order to pursue what I really wanted to do.
In my current job I had a strong group of successors in place and a good candidate to take my job, so I could rest assured the company was in good hands and I wasn't in danger of destroying what I had worked hard to help build (that was important to me), and I had provided enough notice not to leave the company in a short-term lurch.
My wife and kids were extremely supportive (granted, I'm not sure the kids really knew what it meant, other than I wouldn't be going to my office any more -- but maybe Daddy wouldn't be as "stressed out"!). From a financial standpoint, I was very fortunate in that I had the financial wherewithal to leave; our company had recently gone public and had done reasonably well over the past five years. I wouldn't describe my status as "wealthy", but I could say we will have enough if I can manage our affairs appropriately -- but if I don't, heck, I can always go back to work for "the man" if I need to, right :-)
So I shut my eyes, held my nose, and made the jump -- and left my company. Time to figure out what I wanted to do with my life again. Refreshing in some ways, but a very lonely feeling.
On the other hand, I was free -- I had more time to spend with my family, to travel, to read the classics (!), build that beach house I had always talked about, start learning new skills again, to recharge my batteries. That part was awesome. I found the biggest challenge was the social contact -- the people I worked with were very important to me -- that is what I missed, not the job.....at some point, I may blog more about my exit and underlying reasons and emotions....but that's not what this is about. (Very therapeutic for me, however!!!)
Now, what are you going to do?
Even while working, my biggest "hobby" has always been managing my investments -- I love the investment world -- anything having to do with personal finance, investing, trading, wealth/tax/estate management. What you do with your money after you get it. Lots of people are good at making money, but far fewer are adept in the art of how you keep it, protect it, and grow it.
In 2006, the time had come. After nearly 20 years in my industry, at the age of 42 -- I was seriously considering leaving my job in corporate America in what was one of the more challenging decisions I have ever made. A month later, after careful consideration, it was done: I would retire and leave the rat race in the middle of the year. No more working for "the man".
There were a lot of reactions from the people I told -- many reacted in amazement, some thought I must have a secret job lined up (can we join you?), some thought I must have been fired (management layoff, scandal perhaps?), maybe I'd just gone off the deep end (like I hadn't heard that before). After all, over the last 18 years, I had rapidly worked my way through the ranks, became a partner in the business....and through the rapid growth of the company and my own advancement, I found myself managing the second largest regional office of a Fortune 1000 company -- and the world's largest human resources consulting and outsourcing firms. I was the operations head of a group of over 2,000 employees.
Then as I explained what I was thinking to others, the conversation got into: "Don't be ridiculous. Why in the *** would you give up your job -- who leaves a job like that? What are you thinking--have you really thought it through? Do you have enough money? What does your wife and your family think? Do you really know what you are doing? You realize you've been in management a long time -- do you have any real world skills? What if you change your mind? Are you really going to leave behind us and the people you work with?" I will admit these were darned good questions...I was not really sure the answers to all of them, and I was certainly dazed and confused.
What I was sure of....was that I was mentally and emotionally tired. Tired of the long hours and the pressure. Tired of answering to corporate on minutiae and spending time on "administrivia" that did not benefit my clients. Tired of having to 'reorganize' and 'downsize' to squeeze out as much money as possible for short-term thinkers. As much autonomy as I had (after all I was the boss!), I felt trapped, not intellectually stimulated.
What's interesting is that I had remembered reading a book during the late 90's about a former Peat Marwick audit partner that had done "bare bones" retirement at age 35 -- he and his wife decided to downsize and travel the world. While I wasn't quite in the same financial conundrum, I did find a lot of parallels as I went back and re-read it (if you're interested : Cashing In on The American Dream , by Paul Terhorst). It was very motivating because it validated for me that I could leave a "good" job in order to pursue what I really wanted to do.
In my current job I had a strong group of successors in place and a good candidate to take my job, so I could rest assured the company was in good hands and I wasn't in danger of destroying what I had worked hard to help build (that was important to me), and I had provided enough notice not to leave the company in a short-term lurch.
My wife and kids were extremely supportive (granted, I'm not sure the kids really knew what it meant, other than I wouldn't be going to my office any more -- but maybe Daddy wouldn't be as "stressed out"!). From a financial standpoint, I was very fortunate in that I had the financial wherewithal to leave; our company had recently gone public and had done reasonably well over the past five years. I wouldn't describe my status as "wealthy", but I could say we will have enough if I can manage our affairs appropriately -- but if I don't, heck, I can always go back to work for "the man" if I need to, right :-)
So I shut my eyes, held my nose, and made the jump -- and left my company. Time to figure out what I wanted to do with my life again. Refreshing in some ways, but a very lonely feeling.
On the other hand, I was free -- I had more time to spend with my family, to travel, to read the classics (!), build that beach house I had always talked about, start learning new skills again, to recharge my batteries. That part was awesome. I found the biggest challenge was the social contact -- the people I worked with were very important to me -- that is what I missed, not the job.....at some point, I may blog more about my exit and underlying reasons and emotions....but that's not what this is about. (Very therapeutic for me, however!!!)
Now, what are you going to do?
Even while working, my biggest "hobby" has always been managing my investments -- I love the investment world -- anything having to do with personal finance, investing, trading, wealth/tax/estate management. What you do with your money after you get it. Lots of people are good at making money, but far fewer are adept in the art of how you keep it, protect it, and grow it.
Over the last couple of years prior to leaving my job, I started reading every book on investments I could get my hands on. I had a quantitative background -- math, statistics, systems -- and in my old job, I came up through the ranks as an actuary and pension administration consultant who specialized in developing and testing systems. (This background I would find very beneficial in the next year as I develop and test systems for trading.)
I then started trading much more actively, making mistakes, reading more, making more trades, more mistakes, going back to the drawing board, making more mistakes....and so on....and after a while, I was officially started into the wild world of trading, and have been doing it for about a year now.And that's where we're going to start with this blog.
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