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|For Shelley Bruzas, a die-hard Seattle Mariners baseball fan, the team's first season without Ken Griffey Jr. got off to an uncertain, although not unpromising, start. It was April 2000 and Shelley had front-row seats to the first home game against the New York Yankees. The Mariners had already beat the Yankees twice in previous games in New York, and they were hanging on to a 6-3 lead. In the eighth inning, the Yankees' Derek Jeter hit a fly ball to deep center -- trying to repeat his home run earlier that game. From her vantage point behind third base, Shelley had a spectacular view as outfielder Mike Cameron leaped to catch the ball. In response, the crowd roared, with a standing ovation that lasted a good 10 minutes. |
TRAINING FOR THE SHOW
Although Shelley has always been curious about the financial world, it wasn't part of her daily life while growing up. Her parents didn't follow the stock market or teach their children how to invest. "I relate that to sports," she explains. "If your family isn't into sports, you're not going to be. My parents were not sports people at all. I played sports as a kid, but we never watched it on TV or went to games. But now I'm a huge Mariners fan. I love baseball. Later in life, you get introduced to things you didn't grow up with." Investing, like baseball, was something Shelley learned about only as an adult. It took spunk to venture into the investment arena without any experience, but Shelley knew that this game, if only she could learn the rules, could change her life. With her 40th birthday fast approaching, she realized that she should have taken control of her finances earlier.
UP TO BAT
To prepare for investing her own account, Shelley read everything she could get her hands on -- magazines, books, The Wall Street Journal -- and attended a seminar through the National Association of Investors Corporation (NAIC), a nonprofit investment club organization. She scoured the Internet for investment guidelines and fundamental stock information. A financially savvy friend, Jim Peters, provided tips and advice drawn from his 39-year history of investing. Then, armed with her newfound knowledge, she chose a full-service broker and opened her "play account," a speculative cash account (in addition to her 401(k) and IRA), funded with money she wasn't afraid to lose -- money scraped together from extra cash reserves and withdrawn from the savings account she shares with her husband, Bill.
|Shelley chooses stocks based on fundamental criteria, including sales, earnings per share, dividends, long-term debt, 52-week highs and lows, and news. Often, she evaluates a company's performance for as long as one year before purchasing its stock. "I've held as many as 25 stocks at one time, and I have a list of about 50 companies that I'm watching. About once a month, I check their prices. Some of the companies I take off the list; sometimes I put new ones on." How does she keep track of all this research? She takes copious notes in the stock notebook she got from her broker when she opened her first account -- and she carries that notebook with her at all times. |
The time Shelley invests in her portfolio has paid off. Her most profitable stock picks have been ones she thoroughly researched. Take Healtheon/WebMD Corp. (Hlth), for example. When Shelley first heard about Healtheon, a company that creates Internet-based software for the health-care industry, she was intrigued by the company's innovative business concept. Further, Healtheon's management also caught her eye; it was founded by Jim Clark, the former chairman of both Silicon Graphics and Internet superstar Netscape Communications. Shelley followed Healtheon's development carefully and bought in at around $15, shortly after the initial public offering (Ipo) in 1999. The stock surged up to $127 in three and a half months. When the trend turned down, Shelley sold at $110, making a tidy profit.
Shelley feels good about her returns, because she truly earned them. She did her own research and made her own decisions. Although she uses a full-service broker, Shelley has "never, ever relied on his advice." She sometimes asks her broker for information about a company, but when it comes down to buy and sell decisions, she insists: "You have to do your own homework. You don't have to do it daily -- even though I pay attention daily -- but you have to take the initiative. It's your money."
TALLYING THE SCORE
Shelley views her "play account" as a lot of fun and a good learning tool. Better yet, she explains, it provides extra money that she can spend however she sees fit. When the coffers began to bulge recently, she decided it was time to act. "I wanted new couches and I wanted some credit cards paid off and it was around my birthday. I thought, OYou know what? It's time.'" She sold every stock in her account except for a few shares of Cisco, and this time she didn't reinvest. At least, not in more stock. Instead, she decided to rid herself of consumer debt -- an investment in itself -- and reward herself with leather furniture. Did she end up buying the Harley motorcycle? No, but it's still in the works. Besides, Bill recently opened a brokerage account of his own; perhaps the Harley would be a good goal for him!
FOR THE LONG HAUL
Of late, Shelley has been focusing her attention on self-directing her 401(k), an option that only recently became available to her, although she contributed to the plan even before self-direction was offered. If your employer provides 401(k) benefits, she recommends, "Invest as much money as you can into any 401(k) plan offered to you. Starting out as soon as you can makes a huge difference."
"I have a long way to go," Shelley observes. "I'm only 40. That sounds old to a lot of people, but when you look at it, you're going to have to work until you're 65 or 67. Of course, you're hoping that you can do something so you don't have to." She, for one, is doing more than hoping. She's enjoying the tangible, short-term rewards of active investing, but she's banking on the long-term rewards that only come through careful planning and diligent investing.
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