After working in a small investment management firm in Boston for the past two summers, Jen Nicolls decided it was about time she started investing some of her own money. Currently a sophomore in the Whitman School of Management at Syracuse University, Nicolls hopes to major in accounting and finance with a minor in economics. This future businesswoman has some advice for anyone who might be looking to start investing as she did last summer.
Nicolls’ investing strategy is simple – she looks for well-managed, stable companies that may be temporarily out of favor in the market and have an opportunity for long-term growth. She checks to make sure that they maintain an edge over their competition and plans for improving their operations in the future. The companies that offer the greatest growth potential are the stocks she ultimately considers when choosing her portfolio. No matter the state of the economy, Nicolls believes there is always an opportunity to find a gem in the rough.
As with many other investors, Nicolls admits her biggest mistake has been in not always knowing the right time to sell a stock. She typically holds a stock for six to eight months based on if the company meets the price objectives she sets out for her investment. She considers selling when the company’s fundamentals have changed and if the stock does not perform as well as she had originally hoped. However, in some cases she has missed an opportunity to take advantage of further gains by selling too early.
A self-labeled beginner, Nicolls highly recommends Peter Lynch’s book "One Up on Wall Street" as a great read for someone just starting to learn about investing. She believes the book helped her determine the kind of companies worth considering as profitable investments. Nicolls also pays close attention in class, in conversations with peers, and in her weekly investment club meetings at the university for any companies that may provide high earnings potential. "If I think that a company sounds interesting, I’ll look into it," she says. It doesn’t even have to be a conversation about investing for her to find out about a company that might prove interesting and worth a closer look.
Nicolls will tell you that the best way to learn about investing is by talking with other investors. She enjoyed the opportunity, through her summer jobs, to engage in many conversations with analysts. She thinks the key to good investing is to hear an assortment of ideas from a variety of people and learn from their past investment decisions. This helped Nicolls develop her own ideals on why one company can be considered superior to another and what situations could pose caution in the future.
After hearing some juicy gossip about a company with potentially strong growth prospects, Nicolls takes a well-informed approach to learning whether the company will make a solid investment. In fact, she believes "you can never learn too much about a company." She looks to Yahoo! Finance, SEC filings, recent news articles and other investment reports which you can often find online or at your local library, among other resources. Sometimes, Nicolls even participates in conference calls held by the companies to find out more about their future plans. Gathering and compiling information from multiple sources allows her to get a better idea of the company from many angles.
Admittedly taking after her father, who is an analyst himself, Nicolls was able to take a hands-on approach to finance early on, which piqued her interest during childhood. Her father was always there for Nicolls to answer any questions and offer advice when needed. In fact, it was his enthusiasm for investing that helped Nicolls treat her first experiences with choosing investments as a game of hunting down the next best buy.
Although Nicolls plans to pursue her career in financial analysis, that doesn’t mean it takes a finance whiz to be a successful investor. By utilizing the resources available and remaining astute to economic events, you can learn from Nicolls’ simple strategy and prosper in your investing.
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