The short version
- My first two stock investments outside a retirement account were Walmart and General Electric.
- Investing in stable blue chip stocks taught me that blue chip stocks aren't necessarily the best investment.
- Overall, I wish I had invested more and held onto stocks longer in most cases.
My first investments after college
When I started my first corporate finance job at the beginning of my career, I was lucky to have access to a pension plan in addition to a 401(k) match. But I knew I wanted to invest more. After using my dad as a sounding board, I opened my first taxable brokerage account and deposited $500.
As a recent finance grad, I wanted to put my analysis skills and education to good use. I decided the first two single stocks I bought would be big, relatively safe blue chip stocks. I loaded up the investment page and bought about $250 each of Walmart WMT and General Electric GE stock.
A look at WMT and GE stock charts shows the ups and downs of the economy, management changes, spin-offs, and other happenings at some of America’s largest and most storied companies. Here’s a closer look at how those first two investments performed.
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I sold my Walmart stock too early
Walmart was the first stock I picked as an individual investment. My grandpa, who knew Sam Walton personally, was an early Walmart investor and it provided great returns for his portfolio. I bought the stock around the beginning of 2008, when the price was around $50 per share. The stock offered a modest dividend and showed a strong growth history, far outpacing rivals like Target.
I picked this stock at an interesting time. Amazon was just beginning to show its potential as a newly dominant online retailer. Walmart mostly floundered up and down over the next decade. While I kept getting my dividends, the stock seemed unable to break out above a certain price range.
About 10 years later, I had a terrible experience with Walmart’s early online pickup product. I decided Walmart probably couldn’t keep up with Amazon and sold for a modest gain.
In retrospect, however, Walmart did figure out the online shopping system. And Walmart was one of the stock prices that surged during the pandemic. If I had held, my investment would be worth much more today.
More: Buy-and-hold vs. active trading
My instincts were right about General Electric
My second blue chip stock was General Electric (GE). GE traces its roots all the way back to the invention of the lightbulb. I was impressed with GE’s diverse business lines, including power plant manufacturing, jet engines, and a sizeable finance unit.
If you followed the news on GE over the last decade or so, you know it hasn't been a smooth ride. I bought the stock shortly before a serious downturn in performance. GE’s financial business was a major victim of the Financial Crisis in 2007 and 2008. I saw the value of my GE stock nosedive. But I held on for a while.
I eventually soured on the company because it didn’t seem able to turn recover from competitive and management challenges. I sold as the stock was on its way back up before another drop. I ended up with a modest loss.
But looking at how GE has performed since, I made a good decision to sell. The stock price remains below where I bought it in my early 20s.
More: Buying and selling stocks
What I learned from my first 2 stocks
Looking back, I made the best investment decisions I could with the information I had at the time. I have no regrets about my decision to invest in these two companies. But like a sports team re-watching old games, I can learn much from looking back at my early investments.
My purchase of stable blue chip stocks made sense. However, as I was so early in my career, I could have bought stocks with a little more risk and potential. While Walmart and GE were both stable companies with what I believed to be relatively low risk, they both experienced ups and downs and mixed long-term results.
If I could go back knowing what I know now, I might have bought more Walmart to hold for longer and skipped GE. But that would have meant my portfolio was less diverse, which it not a great way to manage risk. So, I’m actually quite proud of the thought process that led to these first two stocks in my portfolio.
I would also tell myself to invest more in general on a regular basis.
Putting a little more into my 401(k) and other investment accounts means I would have had more overall today.
In the long run, my diverse portfolio has performed extremely well.
More: Average retirement savings by age: are you keeping pace?
The bottom line: You win some and you lose some, but you always learn
No investor is perfect. There are always going to be winners and losers. These days, I keep about 80% of my assets in low-cost ETFs for retirement, about 15% in single stocks, and 5% in riskier alternatives.
If I could go back, I would advise myself to buy all of the Amazon stock I could when it was cheap. But since I don't have access to the time machine from Back to the Future, I’ll have to look back and take early investment lessons to heart for future decisions.
My biggest advice to myself is this: buy more stocks and ETFs and hold them longer. Overall, that would have given me the best results.