Part 2: The Grow Your Dough Throwdown - My Pick

So I have delayed this post for a long time because..... well because I was lazy and a little busy, and over that time the content of this post has changed a lot because the markets have changed a lot.
 
So earlier this year I decided to join in the Grow Your Dough Throwdown over at Good Financial Cents. I had an update back in the beginning of January, but I hadn't actually invested my money in anything at the time, today I will reveal how I invested.
 
But first let's start with my strategy. I went into this knowing that since I was only going to be able to invest $1000 I was going to put all of my money into a single investment. This is because if I was going to trade individual stocks then each purchase would cost me about $8. Meaning that if I bought 6 different stocks then I would be spending $48 just on transaction fees I would already be losing about 5% just on fees and that doesn't even count when I eventually sell those and get hit with another $48 fee making it about 10%! That means just to break even my investments have to increase by about 10%. So that made the choice of a single investment much easier.


As I mentioned in my previous post I hoped that I would not start suffering from paralysis by analysis and get my money invested. Because I was treating this like a game where "I needed to be playing, not sitting on the sidelines" I invested my money in a highly speculative company called Mannkind (MNKD) which has a insulin dispensing inhaler that is up for FDA approval later this year. I had been watching this company for a while and wanted to invest a little into it, but since I was in this challenge I pushed to get into a position because I felt I needed to, not because I felt the price was good. So I purchased 165 shares at about $6.00 per share.
 
This was not the price I was looking for but I was in the game. The problem is, I should have not treated any kind of investing as a game, I should have waited until I thought the price was fair (which I would thought was better at around $5.50 and eventually the price drifted down to there). The price eventually went down close to $5 and has since rebounded back up to about $5.65 so overall my investment is down about 7.25%
 
Considering how speculative of an investment I choose and the fact that the market has gone through a mild correction during the end of January I could be a lot worse off then I am so I'm okay with that and now I'm just going to wait and see what happens.
 
One thing that I considered doing at the beginning of this contest was investing in something completely different and possibly even more speculative and that would be BitCoins. But that investment has fluctuated even more in both directions, but the last week or so they have dropped because of more issues with the platform, so I guess I'm glad I didn't try that investment.
 
On another note, maybe it's because I don't know how to use Scottrade's tools but I can't seem to find anything that will show me my order history so I can't find the exact amount that it cost me. I can't even seem to find how much my investment has gone up or down since I purchased it so I have to do this calculation by hand myself. To me this is a huge deterrent against the platform and I probably won't be using Scottrade after I am done with this little experiment.

Related Post:
The Grow Your Dough Throwdown - The Beginning
Part 2: The Grow Your Dough Throwdown - My Pick
Investing Tutorial: Binary Events
The Grow Your Dough Throwdown - May Update

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