How Do You Get Started Investing In The Stock Market

How do you get started investing in the stock market? So the three things we're going to talk about today is how do you get started, right? How do you properly do the due diligence to begin? I'm going to talk about the number one app, and we are crushing it. We even beat Robinhood because this app is so good. We'll keep you protected in the market. And then number three, how do you protect yourself from capital gains? And inside of that, I'm going to share with you some Roth IRA techniques. Now to do this today, I'm bringing Kelly Korshak, who is the algorithm designer. He built iFlip. He is the most genius man I know in this category. So we're going to cut away to an interview right now to hear from what I think world-leading expert in this category. So Kelly, welcome. Hello, Laura. Good to be with you again. Yes. It's great to have you here. We've been on my YouTube channel before and talked about NFTs. So give people just a little few minutes of background or a minute of background, since we don't have a lot of time, on who you are, what makes you the expert to talk about these topics? Wow. Well, thank you for that. I always like being called an expert. I've been in this business for, oh, geez, probably 30 years or more. I started as a trader. I was hired by Salomon Brothers out of college. And my career took me to many places, but most focused on the assembly and use of data and other kinds of information as it applies to price discovery in the stock market, which means that I was a person that was a quantitative analyst and also a portfolio manager and a risk manager throughout my career that gave me insights to the way the markets move, their behavior, and the behavior of those that are invested in them. So Kelly, as those that are listening are here to learn, how do you get started? How do you start due diligence for someone who's just beginning to put together a stock portfolio? Well, of course, there's two due diligences that must be completed. And one, of course, if you're committed to investing in the market, one, where do you put your money? Which brokerage house? And then two, once you're there, what do you buy? Because you're not there to go sell stocks generally. So the first due diligence process is to find the right broker. Nowadays, brokers are generally free on commissions. And so there's no issues with that anymore. They're all generally the same. Our company, Flip, has a few other advantages in the fact that it can actually help you make investment decisions by just reading through it and learning inside the platform. Second due diligence is what should you buy? And that goes through another set of questionnaires you have to all ask yourself. And what is your risk profile? Are you an aggressive person? Are you a conservative person? Are you somewhere in the middle? Are you old, middle aged or young? All of these things have an impact on how you should go about performing your due diligence in terms of the choice of stocks that you put into a portfolio. So Kelly, you've mentioned a stock pipeline and starting to kind of reset. For many people who got hit hard during the pandemic, March 2020, 33 percent drop in the market. How do they start that? What are some tips you could give people or insights with your experience? The good news about the pandemic, if there is any such thing, was that the pandemic was really a short term event. And the pain people experienced occurred so fast that it didn't have the impact, for example, as the 2008 financial crisis, which was caused by a myriad of different things. So if you're invested today in any way, you should probably be taking a good, long, hard look at your existing goals and see if they remain the same. You should also, if you're not invested today, again, you go through those same three due diligence factors I just mentioned, which one? The first one would be age. If you're younger, you should be aggressive. That doesn't mean you should be aggressive today, but in general, you're betting on something that makes that the market is designed to do, which is advance, go higher. So if you're younger, you can pretty much safely buy the S&P and do well. However, if you're older, you have to look at different things because now you shouldn't be as aggressive. You should be more moderate, if not even conservative. And if that's such a case like this, especially because we have a certain interesting environment that's developed over the last year, I think it's important to take a good, hard look at what history has told you about markets under these kinds of influences. And the main influence today, of course, is a rising interest rate environment inside of a red hot recovery economy. And so as people are doing their due diligence and picking stocks, I know you're pretty firm on being in the equities and having dividends. So talk a little bit about that just as part of due diligence and what they could be looking for. Very good question. Again, my background, as everybody knows, and if you don't, it's mathematics. It's a mathematical approach to the market. But that being said, I'm allowed to opine that in a current environment right now, a dividend yielding portfolio seem to be very, very attractive. And why is that? Well, we know interest rates are going higher. I mean, that's a clear signal going on. And we all should know that at a point when interest rates are zero, that they can't really remain there forever. There will come an end to this cycle of interest rates, which is actually a 40-year cycle. And that means that if interest rates are going to rise, dividend stocks will be held more dear. Things will flow to them. We've already seen that in the energy sector, in many other sectors, where over the last four to eight months, that people have shifted into things that are more defensive-orientated because they have these high dividends, because they are able to pay these rates a higher rate for the use of your capital in the equity markets. So it's such a way that it's attractive for most anybody to buy a share of stock that will pay you 4% or 5% rather than putting it into the bank that pays you 0%. That is the attraction right now of dividend yielding stocks. And I would assume those that are watching this, if you are a little older, those would be good to be looking at as far as initial due diligence and some choices? Yes. I mean, the stocks that represent this best are things like Exxon Mobile, the oil sector in general. The reason is because these are companies that we've all heard of. We understand what they are. The current administration doesn't like these kind of stocks, but this is just the current administration, and future administrations will likely have a completely different view. So these stocks offer very good dividend opportunity. Other ones that offer very good dividend opportunity are anything to do with the supply line, a company that comes to mind is a company called ZIM. It pays an enormous dividend, but there's a VAT tax involved, but it doesn't matter to you, because it focuses on international supply chains. And they're paying a dividend that is north of 11% after the VAT tax. So these kind of companies are exploding in growth. And actually, I see no reason why some of these stocks couldn't double and continue to pay hefty, hefty dividends. I love that. Now let's switch to the number one app, right? All of you watching, you've heard me talk about iFlip before. You designed it. What problem were you solving, Kelly, as a way to describe iFlip? What problem does it solve for the person that's out here, especially somebody starting? We're solving that problem right there for the starting and new investor or the investor that really doesn't, the existing investor that really doesn't know what to pick. So they know, oh, I should have dividend stocks, but which ones do they pick? But we, of course, as a mobile app, we, or even a web-based app, we do not give advice, but that doesn't mean that we can't explain and show and highlight certain kinds of stocks that say, that do have these dividends. So most people don't even know where to begin. We solve that problem. We make it easy to find the dividend yielding stocks. We also make it possible to run the various combinations of these kinds of dividend stocks or any kind of stock to be able to offer the best guess at the future risk reward profile to buy them now and with the highest opportunity to, A, receive the dividend and B, advance the underlying value of the stocks you purchase. We put it together under one package and we call it a SmartFolio. So talk a little bit about the automation of it. Because I think for me, I did Forex trading and looked at stock trading, but I'm not the person who's going to get up to the market, close with the market. I'm more of a real estate, I'm a different kind of investor. So if you're not going to be trading, what does iFlip do from the automation standpoint to provide such high value? Well, what iFlip does beyond being able to assemble in a SmartFolio relevant stocks that are all generally S&P 500 stocks, which means none of them are stocks where we're looking to find the next Apple computer. We're just looking how to balance a portfolio with things that household names, the things people already know and put them together in a most meaningful, efficient way possible. And beyond that, we do something else. We do this all automatically. So when a person chooses one of these SmartFolios, it literally will change the components inside of it periodically. It will buy and sell the stock based on the risk reward periodically. It doesn't trade much. It's not about trading. 90% of traders generally lose 90% of their money in 90 days. So we don't want to be a trader. What we want to be as an investor, we want to make it easy. So when you choose what you're after aggressive, then guess what, it will choose aggressive stocks. It will manage them for you after you've bought them, buy them and sell them periodically to manage the risk. And finally, it will change them periodically for you. I mean, companies like Eastman Kodak don't last forever. They were great at one time, but today they're gone. Same thing may be true in the future. And we have to be cogent of that. That's what iFlip does. It is a soup to nuts solution for investing for both a newbie or actually a seasoned investor. Yeah. And I love it. I mean, in March, 2020, you know, when the market crashed and like everybody was on average down 33 plus percent lowest since 1929, I think I was about 2.8, not even 3% of a loss because of the software and your brilliance of those algorithms taking you out of the market. Now, the last point really quick before we go, our time just clicks away really quick here. Give us a few sentences about taxes. Cause I know when people move over to iFlip, they can move in their current position and then they can adjust when they get over there, but talk about capital gains, talk about taxes. If someone already has an existing account, the money that you might have, if you decide to open up an iFlip account, there's something called an ACATs transfer. All that is, is a fancy name to say, take whatever you have at your existing broker dealer. Maybe it's Charles Schwab and move everything, all the cash, all the securities over to Flip. Once they get over to Flip, you can make your own decisions at that point to see, hey, do you want to keep them or do you want to exchange them for smart portfolios? Once you do that, that means that whatever stocks you might have brought over, they could be sold. And if they're sold, you will incur a tax consequence from that. But that's not a bad thing. Generally, when you reset a portfolio, the idea is not to concern yourself so much with your tax, but to concern yourself with the risk you have of owning it today and over the coming months. So if you have a risk of losing 20 or 30% over the coming months, but if you sold your stock and you have the entire value of that stock, but if you sold your stock and you took your short-term capital gains and you had to pay $400 because you actually made money on that stock, what would you rather do? Pay the $400 or risk losing 30% of the entire value of your stock, not just the profit. So the stock market has a feature in it, which means there's something called long-term capital gains, which we try to aim our customers toward, to own the stock in such a way that if you have to sell it, it's only because the risk says you must. It's not worth it. And it looks at your tax consequence and says, no, it's better not to own this stock because the tax consequence is insignificant relative to the ownership consequence over the coming months. So at the end of the day, generally people that should really be worried about tax consequences are people with great sums of money, half a million, a million dollars or more. If you have a smaller portfolio from $20,000 to $200,000, these things are much less significant. And exchange of your stocks internally bear generally either little or even positive tax consequences when you come over to Flip and then re-shuffle them, sell some, buy others. Awesome. So thank you, Kelly. I love this man's advice. He is my go-to anything stock market related and now cryptocurrency related. So before we end, I want you to go subscribe to our channel. I'm here five days a week. Sometimes I have guests. Mostly it's me just giving financial literacy tips to you and your family. Click the notification button, share it with your teenage kids, share it with your family. You all need to start this conversation about money in your household. And I need you to click below to go get this iFlip app. All of you can begin it today without any obligation and just start seeing how you could be protected in the market. Now, as we end, I want you to go take my financial personality quiz. It's going to put you into one of four profiles. And if you're ready to invest, start putting money into iFlip today. A lot of our clients use that as a wealth account. Then once we're done with that, we're going to send you out an application. Make sure you click the button that you either want to talk to Kelly or someone directly at the iFlip team. And if you want to get a Roth IRA or corporation, just put it on that app and we will move it around to our teams to help you get started today. And we'll talk to you tomorrow.