Initial Investment in Robinhood

When selecting a portfolio, one of the most important things to seek is a profit. We're not investing money for it to stay stable or lose value but instead we're looking for it to appreciate in value.

So, in order to give us a chance to get gains on our investments is looking at companies that are going to grow. Either a company is already established and their product will keep on growing or they are under valued and will grow to their actual worth.

One of my first guidelines is that a company has a market cap of over 300M so that I know that it's an established company. Anything lower than this means that the company's stock is going to be more volatile while its value is determined. Because I'm trading on Robinhood, I don't have access to day trading so I'm going to stay away from these because a company might grow by 100% and then drop by 100%.

The next guideline that I was looking for was a P/E ratio of between 10 and 15. The current P/E ratio of the S&P is around 17. If a company is just below the index ratio, there's a good chance that its stock will grow to be over the ratio of the index. This can be because of two reasons:

1. The price of the stock grows while the earnings remain the same
2. The earnings shrink while the price remains the same

From my point of view, number one is more likely out of the two options. If the price is going to drop, there is a reason for it and the price will probably start trending downwards before any large decrease. Number one occurs when people realize that the stock is under-priced which is what I'm looking at getting on.

The third guide that I'm looking at is the moving average of the stock must be trending upwards within the last 50 days. This helps to mitigate the risk that can happen from number two on my previous risk.

So, I recently deposited a measly $500 into Robinhood and began trading. My portfolio is as follows:

• Target (TGT) 1 share @ $63.75
• Globus Medical (GMED) 1 share @ $26.03
• Luxoft Holding (LXFT) 1 share @ $59.35
• Anika Therapeutics (ANIK) 1 share @ $49.51
• SPDR S&P 500 Dividend ETF (SDY) 2 shares @ $ 85.79
• Advanced Micro Devices (AMD) 5 shares @ $10.56
• AT&T (T) 1 share @ $41.71
• CoreCivic (CXW) 1 share @ $28.97
• Pro-Dex (DEX) 1 share @ $5.25

This portfolio comes up to $498.95 invested and $1.05 left in cash. The reason why I did not invest more than one share in each stock was so that I could have diversification between the different sectors. 

Up next will be my weekly review of how I've done during week one of my stock market adventures. Stay tuned!