FAQ & GETTING STARTED
IMPORTANCE OF FUNDAMENTAL AND TECHNICAL ANALYSIS
It is our belief that both fundamental and technical analysis are incredibly important factors in figuring out which assets to purchase. Fundamental analysis focuses on a companies fundamentals: these are things such as their earnings, the overall economy and how it will affect said company, their expenses, and so forth. Technical analysis, on the other hand, is concentrated on movements in the actual stock or the market it is apart of—is this stock going up, or down? Is there an identifiable pattern? How much volume (# of shares) are being traded today?
WHAT MAKES A COMPANY FUNDAMENTALLY SOUND?
Fundamentally sound companies are companies that, in the long term, are or will be successful. There are many ways to tell if a company is fundamentally sound, and each of these gives credence to a company's fundamental reliability. Earnings reports are oftentimes a good way to understand a company's long-term reliability, as publicly shown statistics will show if a company is profitable, and if they'll be capable of scaling up said profits in the future. Another deceptively simple way to determine if a company is fundamentally sound is by looking at the business's model and what it is they're offering. Companies that fit these criteria are more fundamentally sound than others and are therefore capable of attracting a larger number of investors in the long term.
WHAT IS THE DIFFERENCE BETWEEN A GROWTH STOCK AND VALUE STOCK?
Growth stocks and value stocks both have their places in a portfolio, but before you go purchasing any stock recommended to you, it's good to do your research and understand what kind of stock you're buying into. Growth stocks are stocks that people believe can reliably outperform the market as time goes on—think Amazon, Fiverr, and Facebook. These are stocks that have a reliable long-term model, perhaps a reliable long-term need, or people believe they'll have a notable and positive affect in their respective fields.
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Value stocks are stocks that people believe are underperforming, and are therefore undervalued. Perhaps a stock has great earnings and potential, but analysts are giving it cheap valuations. This is a very broad scenario, but this is a scenario in which a stock, at a surface level, would be considered a value stock. These are stocks that, despite outstanding fundamentals, for example, are trading at low prices—you're essentially purchasing a stock at a sale, and are therefore getting a lot of value.
HOW DO WE GET THE MOST OUT OF A DOWN MARKET?
Although market turbulence may be frightening at first, look at it as an opportunity. One thing that sets great investors apart from others is exactly this mindset. We often hear from famous investors such as Warren Buffett that you should take advantage of stocks when the market is down, and he's absolutely right. As he says, "Be fearful when others are greedy. Be greedy when others are fearful." Don't be afraid to reinvest or simply hold through turbulence; the market is destined to be shaky from time to time.
WHAT IS CRYPTOCURRENCY? IS IT WORTH INVESTING IN?
Cryptocurrency is an alternative method of investing, and can provide investors with serious returns if they do their research and are capable of withstanding the crypto market's volatility. There are many tokens out there with big goals that are both efficient and can enact positive change. We recommend buying cryptocurrencies with innovative ideas that you can see becoming valuable in the future.
WHAT IS AÂ SPAC?
A special-purpose acquisition company (SPAC, also known as a blank check company) is a shell corporation that aims to merge with an established business. SPACs allow retail investors like you and us to invest in companies before they gain massive hype, unlike IPOs, which oftentimes already have a slew of private investors before offering day. This means retail investors can get a lot more bang for their buck if they invest in the right SPACs, rather than lose on their initial purchase due to private investing.
HOW DO I SET UP MY FIRST PORTFOLIO?
Starting a portfolio is a vital step in jumpstarting your financial future. We suggest that everyone begin investing with whatever amount of disposable income they can afford. Regardless of the size of one's portfolio, understanding financial markets and getting used to the ups and downs are both incredibly useful skills to have! It will allow you, as an investor, to pick apart public markets and withstand turbulent market conditions as you upscale your portfolio.
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Make sure you open an investment account with whatever brokerage you're comfortable with; a handful we have positive personal experience with are TD Ameritrade, LPL Financial, E*TRADE, and Chase ROTH, but make sure to do your own research to see what brokerage best suits your needs! To find the best option for you, we would also recommend having a discussion with your tax advisor. Depending on your goals, we suggest investing in a handful of stocks with varying degrees of volatility. We provide such an array of stocks in the "portfolio" tab above, so feel free to take inspiration from us!