Matt Hollosy, a 24-year-old native of Boston and graduate of Indiana University – Bloomington, has been lucky to have such a great financial role model as his dad. Being the son of a financial planner allowed Hollosy to get a jump start on investing beginning at the young age of nine, when he would pick his dad’s brain on all sorts of personal finance issues. If that is not enough to get your attention, let me tell you a little more about Hollosy’s investing advice.
Hollosy admits to speculating on a few stocks, but never on more than 20% of his portfolio’s value. His main strategy is what he calls "best of breed," which means that he hand picks each and every stock he owns because it is a strong company and a strong market performer.
Within his portfolio, Hollosy likes to diversify among industries such as consumer products, financials, oil, tech, Internet and healthcare. He thus avoids the pitfalls of uncertainty and risks associated with the likes of corporate scandals such as Enron. He especially likes companies that have a dividend, but doesn’t rule any companies out based on this criterion.
Hollosy doesn’t just go out and spend the money he makes as dividends. In fact, he never sees this money except on his account statements because he participates in a dividend reinvestment plan, which allows him to put the funds he receives in dividends into additional shares of stock of that company.
Getting started investing early as well as doing adequate research on investments are Hollosy’s two biggest points of advice to novices. You may wonder what constitutes adequate research. Well, one way is simply to be up on the latest local, national, and international news. This can help you determine which sectors are strong now and which may be strong in the future.
His favorite magazine is Fortune, because of the variety of articles and industry and investing overviews. He also keeps up on news and performs some stock research online, especially on Yahoo! Finance, Street.com, Morningstar as well as Fortune.com. Using Yahoo! Finance to get information on the profiles of companies and to find financial information, Hollosy is able to begin his analysis of whether a company is a good investment or not. He then analyzes whether the industry of a particular company looks poised for potential future growth.
Hollosy loves the insights and advice George S. Clason provides in his book "The Richest Man in Babylon." He looks to the outspoken Jim Cramer, a contributor to Street.com as well as the host of CNBC’s Mad Money, as a role model for financial success and knowledge. Billionaire Warren Buffett also ranks highly on his list because of Buffet’s vast experiences and skill in choosing stocks that perform well. Although very different in their own right, these three men are known and respected in the world of investing for their talents and successes.
Though Hollosy doesn’t have much free time to monitor his investments or even a lot of excess cash flows starting out as a product engineer at an automotive company, he suggests setting aside a certain percentage of your income for investments. For those people who have jobs offering 401(k) plans, he suggests that they take advantage of the tax benefits of the opportunity to save a portion of their money by having it automatically withdrawn from their pay check. How much easier can investing get?
Hollosy hopes that his investments will pay off in the future in allowing him to help support a family, pursue an MBA and, ultimately, to retire in his middle-fifties. The skills and experiences he has built throughout his childhood and teens should not serve to discourage those who haven’t started investing yet; they should serve as an impetus to jump start investing from here on out!
Matt Hollosy’s Keys to Investing
- Use automatic deposits into employer 401k
- Reinvest profits
- Keep track of financial news
- Choose industry leaders with strong financials
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