Getting the Most out of Life

Think Making Money in the Stock Market Is Just for Pros? Think Again

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Does the concept of making money in the stock market sound intimidating? Do you think it’s something only financial professionals can achieve? If so, there’s good news: You’re wrong.

Getting Started

Kimberly Ehardt, 30, is a firefighter is Austin, Texas. She’s never taken a finance, economics, or business class. She has no official training in anything remotely related to investments. She can extinguish your kitchen fire and treat minor burns, but she’s not trained in reading SEC filings, quarterly earnings reports, or balance sheets.

Believe it or not, this woman can check “making money in the stock market” off her list of successes; she’s earned double-digit returns on her investments for the past three years.

We’re not talking about gobs of money here. Kimberly isn’t a millionaire. She came from a hardworking Midwestern family and earns a modest salary. She didn’t have a high initial investment, and as a result, many traditional financial advisers weren’t interested in working with her.

Research and Prepare

Kimberly took matters into her own hands. She educated herself, reading books about basic financial principles during her spare time. She used free online calculators and software to start analyzing factors like asset allocation (how she diversifies her portfolio among different types of investments), expense ratios (the fees associated with various funds), and asset location (keeping different investments in various account types for the sake of minimizing taxes).

“The thing is, when you’re just starting out, it’s tempting to think that there’s some silver bullet,” she says. “You look at Apple or Tesla and you’re like, ‘I just need to find the next one.'”

“But the tough part, really, is accepting that there’s no magical stock,” she explains. “We only know the winners in hindsight. You can only do well by holding the good stuff, not aiming for the great stuff.”

Implement a Strategy

Her stock market strategy is both disciplined and simple: She invests in a mix of low-fee index funds and exchange-traded funds that represent the broad market. She occasionally selects individual stocks with a small portion of her overall portfolio, but she doesn’t overweight her portfolio on any single stock, or, as she phrases it, “don’t bet the house”.

She also practices dollar-cost averaging: investing in the market with every paycheck, regardless of whether the overall market is trading at a high or a low.

“What’s cool is that the best strategy is also the easiest—just set it and forget it,” she says. She reviews her asset allocation about once every two to three months, but she doesn’t stress over day-to-day market fluctuations.

Stay the Course

Despite the simplicity of her strategy, she emphasizes that having the discipline to stick to dollar-cost averaging is a challenge.

“When I started, I didn’t want to get near stocks at all,” she says. “I hated the idea of losing money that I’d worked so hard to earn.”

The recession in 2008 was scary. She was too young to have many investments prior to the market collapse, but seeing others lose their portfolios intimidated her.

“I thought, ‘What if you retire in the same year that there’s another crash?'” she said. “But that was silly. You don’t withdraw all your money the year you retire.”

The turning point came from watching the market recovery from 2009 to 2012. “If things could be that bad—and they’re okay again—then I’ll probably be all right,” she recalls thinking.

Investing in the stock market is not just for the rich. If you prepare yourself, strategize, and commit to your plan, you can turn a profit even with a modest income.

Paula Pant is the founder of award-winning website and a journalist and blogger specializing in personal finance, real estate and lifestyle design. She has been featured more than three dozen publications, including Forbes, DailyFinance, Marketplace Money, Business Insider, Inc. Magazine, and many more.