The Fawn of Wall Street: “Stocks, Bonds, and Bear (Markets) Oh My!” or, Learning the Stock Market

So… its 2016 and here is what I used to know about stock investing and mutual funds: sometimes adults would be categorically really happy and other times they would be catastrophically Kurt Cobain sad. That was my knowledge when I was 7 years of age. Today, 2 decades, 2 huge motion pictures (1 including God’s gift to the world, DiCaprio), and a new blog later, my adulting gears have set in motion to learn and begin investing in things outside of Chanel perfumes and good denim.  Thanks to the extensive research skills I developed at a top-tier (party) university, I have done some digging, some interviews, and some intensive reading to provide you and myself some good tips when making our first investments.

Yes you can totally pick up an Investing for Dummies book, but this is better. This is like…Investing for Basic Bitches (hmm…did I just come up with my next book?)

Let’s start with some brief history, some basic vocabulary, and end up at Where Did My Money Go Road.


The Twilight (Zone) Saga…or… The Origin of the Mutual Fund

  • Fact: 1980-‘90s: Mutual fund investments were at their all-time highs when investors saw re-dank-ulous returns.

DID YOU KNOW? (because I didn’t…): Investing supposedly began by a Dutch Merchant, Adriaan van Ketwich which potentially gave King William I the idea in the Netherlands in 1822 . Boring but true. This is trivia worthy.

  • The idea of investment trusts caught on and made it’s way out to Switzerland, then Scotland, then (fine, I’m kidding but ultimately it did come true).
  • The modern fund or, the Massachusetts Investors’ Trust came into play in 1924 going public in 1928 and is known today as MFS Investment Management
  • Eventually, the stock market had a   h u g e   crash known as the oh-so-clever title: The Stock Market Crash of 1929—clearing out highly-leveraged closed-end funds. Meanwhile, small open-end funds pulled a Tina Turner and made a big fuss about surviving, and they did just that.
  • This sparked the attention of our Uncle Sam and his loving regulators and together they mated to make a baby we know today as Securities and Exchange Commission (SEC) which would protect investors. Mutual Funds were now required to register with the SEC. Later, other things happened.

Okay so history is in the past, what does this all mean for me and making a freaking investment?

Relax. I’m getting to it.


  • The market continues to expand, and grow, and would be a “trending” topic if just happening today
  • 1954: markets surpassed the 1929 peak and then the mutual fund industry continued to…you got it…expand some more.
  • 1960s: Aggressive growth funds are formed (Definition brought to you by A mutual fund that attempts to achieve the highest capital gains. Investments held in these funds are companies that demonstrate high growth potential, usually accompanied by a lot of share price volatility. These funds are only for non risk-averse investors willing to accept a high risk-return trade-off.)
  • 1969: The Bear Market calms everyone the eff down and realize that perhaps they’ve just been a tad much “on one” (Definition brought to you by bear market is a condition in which securities prices fall and widespread pessimism causes the stock market’s downward spiral to be self-sustaining.)
  •  1971: Two dudes, Fouse and McQuown, of Wells Fargo Bank establish the 1st Index Fund which Bogle (as in John- not the winery) used to create The Vanguard Group. Google this further if you care.
  •  1980s and ‘90s brought the bull market (Definition brought to you by A bull market is a financial market of a group of securities in which prices are rising or are expected to rise. The term “bull market” is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, currencies and commodities.)
    • Fund Managers that are now famous because of bull market obsession:
    • 1. Max Heine (passed away in Tucson-fact for you Wildcats)
    • 2. Michael Price (not hot)
    • 3. Peter Lynch (also not hot, but such a Capricorn)
  • More Recently: The Tech bubble and scandals showed the 50 shades of shadiness of the industry.
  • Finally today: The industry is still growing despite the scandals and is healthy. Except people aren’t running around doing a bunch of drugs and stealing money (at least not like they used to, now they’re more discreet about it)




Making Your First Investment

Although stock investing is a practice and there is no simple way to learn everything, I’ve set aside 10 basic bitch things you need to know before buying your first stock.

1. Know how much to invest. 

Ultimately you can put in as much as your little heart desires, but a smart rule-of-thumb is taking the number 100 or 110 and subtracting your age to get a percentage of your portfolio you will use to invest. For example, if you are 30, then 70-80% of your doll-hairs should go towards investing. Basically the closer you get to death the less you want to mess around in risky business should you lose everything in a crash. To sugarcoat it.


2. Will you invest in one stock or many?

Remember earlier when you were reading the history of the mutual fund and I mentioned the Index Fund? Well this means in a single investment you are able to invest in many stocks, as many in that index! They can reduce risk because if the company does poorly and goes bankrupt, OR when the stock market does crash again, and it will, you didn’t put all your eggs in one basket. Its spread across your portfolio like the in-n-out stains in your car seat you don’t notice but your friends do. This is different than an individual stock, which the best example I can think of is if you’re at Nordstrom shoe section, would you rather invest in just Paul Green? Or do you want to invest in ALL the shoes? Mmmm. Shoes.


3. Diversification

Well shoot. Now you need to decide how many stocks you want. The popular answer I received when asked how many I should buy varied. I asked a handful of business owners, financial advisors, and an old professor their thoughts and while some refused to give me a definitive answer it seemed clear it was between 10-20 stocks spread across different industries to make sure you are staying diversified for that upcoming crash we are anticipating. However, this is if you are buying individual stocks. It’s best to know your financial ability and decide where you are comfortable as a novice. If you do want to stick with index funds, then you can start with 1-3. Lifecycle fund: (Definition brought to you by the U.S Securities and Exchange Commission)



4. Dividends and Emergency Funds

Dividends are commonly chosen by stocks to distribute their profits are one way to do so. Stocks can also distribute profits towards reinvesting in the grow of the company. Statistically over the past 80 years’ dividend stocks have been more defensive and less unpredictable then non-dividend stocks according to Matthew Frankel of the Motley Fool.

Emergency Funds: This conversation can trace back to another post on this blog regarding saving money, but assuming you’ve read it and are 47% richer since you have, I will go over this again. When gambling with your hard earned money you should most definitely be saving enough money for at least 6 months’ cost of living and rent should you face unemployment or an unexpected problem. This is important as well in case a company you’ve invested in faces their own issues.


5.Winner Winner Cotton Ball and Bbq Sauce Dinner


Welcome to Where Did My Money Go Road! You’ve made it! Seriously, where is your money? Did you make any? How much should you really expect to make in your first year? Okay so obviously there is not a literal number and I can’t predict ALL of the future. I can tell you what I learned from my scholarly research though. New investors are suggested to take a “long-term view of the markets”. Surprisingly even though the market does not stay stable all year long, it is consistent over longer periods of time. Take a look over a recent 25-year period and look at the annual total returns to get an idea of what to expect.


6. What are You Buying?

This one requires common sense. If you don’t understand what you’re buying you should probably look elsewhere. You should have some idea of the business model.


7. Free Money!

Many employers will match some to all contributions to your 401k. Take advantage! If your company wants to give you free money take it. Do you like being poor?


8. No means No

One should know when you cross a red flag when choosing stocks. There are a ton so use that common sense thing we discussed earlier. Here are some common things to avoid:

  • Companies that don’t earn any profits
  • Stocks whose share prices seem to always drop (look at the three- or five-year chart)
  • Companies that are under investigation
  • Companies with lots of debt
  • Stocks with recent dividend cuts, or an unstable dividend history

Other things to avoid:

  • Penny stocks. Unless Leonardo DiCaprio is actually advising you, don’t fall for these. Also, call me immediately if you’re with Leo. See CONTACT above.
  • Purchasing stocks based on something you’ve heard. Rumor has it this is stupid.
  • Borrowed money, or, “Margin”. You can increase your losses using these.

Please Note: The SEC recommends that you ask questions and check out the answers with an unbiased source before you invest.  Always take your time and talk to trusted friends and family members before investing.


9. Volatile Stocks

You can look at a stocks beta provided with any stock quote and find out how volatile you can expect it to be. If the beta < 1 then the stock is expected to react LESS to changes in the market while > 1 means it will react MORE.


10. Continue to Educate Yourself

Absorb information about the markets, evaluating stock, keeping a diversified portfolio, and speak to professionals that you trust. Remember that history is a great tool in learning about what to expect as well.


Boom. Look at you. All educated. We are growing up so fast.

P.S.:  Charles Schwab is not a Q-tip company.


More about Danielle Angrest

I graduated from the University of Arizona in Psychology with a passion for understanding people. Trying and learning new things are an absolute must for me. I love my Australian Shepherd, Socrates and his ability to stay calm at the end of every Game of Thrones episode. I love being ironically indoorsy. Sushi, skydiving, bourbon, and brunch are always answered with a yes if you ask me. Most of all, I love humor and wit, and the -art- of growing up.

3 thoughts on “The Fawn of Wall Street: “Stocks, Bonds, and Bear (Markets) Oh My!” or, Learning the Stock Market

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    1. Danielle Angrest

      Thanks JayneOsmond. I’ll start writing more. I’ll start with this reply.


  2. Danielle Angrest

    Thanks we will improve this :). Adulting is hard.


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