Within our own realms of personal finance, economic uncertainties can be anticipated by saving for emergencies and investing for growth (investing includes paying for higher education and seeking returns).  The amounts will change during a lifetime: 

  • educational expenses usually peak in early adulthood
  • total savings should increase to a permanently high level for lifetime protection
  • investment returns should grow in preparation for retirement.  

Start with Savings: The long path to success begins with a carefully managed household budget.  The hardest thing to understand is that saving cash for emergencies is smart to do in today’s economic environment of costly surprises (e.g., job loss, excessive medical bills, other disasters).  Young adults should accumulate at least 3 months of salary in a bank account, then expand to 12 months of salary as their financial responsabilities grow.  If for no other reason, owning a large bank account will be useful after retirement.  

Invest for Growth: With respect to seeking returns, I advocate making do-it-yourself investments in the stock market for long periods of time.  Trading in the stock market is easy once you open a brokerage account and learn how to use the broker’s trading platform.  Effective do-it-yourself investing —which involves making “small trades”— requires regular investments of $100, or more, compared to institutional investments of at least $100,000 (i.e., “large trades”).  The best way to invest in stocks without depending on good luck is by selecting excellent companies whose stock shares are not overpriced.  Investors who don’t have the time to create and manage a stock portfolio would do well to invest regularly in one or more stock-index funds.  Either way, the returns from well placed stock market investments are likely to grow over several market cycles.  Day trading and swing investing are high risk ventures with less certain returns.  


Articles in the Small Trades Journal collectively describe the field of do-it-yourself-investing (DIYI) from start to finish.  To begin with, essential elements of Personal Finance include honoring a household budget, saving for emergencies, and respecting the time value of money.  I condense the vast topic of DIYI into basic concepts combined with advice and exposure to the mathematics of investment returns.  Markets, Indices, & Trading incorporate the nuts & bolts of investing.  An understanding and appreciation of business Companies distinguishes informed investors from speculators and gamblers.  The ownership of Stocks and Investment Funds are capable of providing results that most investors can achieve with success; other types of investments are rarely mentioned in this blog.  Finally, I speak from experience when saying that a Portfolio of diversified assets must be maintained to protect from investment failure. Appendices of Annual Reports and Valuations illustrate the spirit of this Small Trades Journal.            

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