I made a mistake in the title. Investment is the wrong word… gamble is better.
Bad gamble might be the best phrase.
To make matters worse, I invested money that wasn’t mine.
Trust me, it’ll all make sense in the end.
I gamble/invested in an exchange traded fund (ETF) focused on Greek stocks (symbol: GREK).
How bad is this “investment”?
Here’s what Benzinga said about it a few days ago:
“Greece ETF Needs A Shot Of Confidence… There are problems aplenty for Greek banks, too, and that is problematic for GREK because the ETF allocates nearly 39 percent of its weight to bank stocks… The ratings agency’s standalone viability rating on Greek banks is ‘F.’… “
On the surface, it looks terrible. It reminds me of the time I put leftover Chinese food in the rice cooker (with rice) and my wife thought I had gone insane by adding poop to rice. If you take the time to understand, something that seems terrible can actually be delicious.
I may not be able to spin straw into gold, but I’m going to try to make this poop into delicious food.
The key to my success is the investment account. In this case it is Robinhood.com. (Disclaimer: I have received no money from or on behalf of Robinhood for this article.)
Robinhood is a brokerage that has no fee trading. Typically you may pay $8-12 for making a trade, such as buying or selling a stock. If you are using your money to invest a good-size chunk of money at once it’s not a big deal. You want to be careful not to trade too often as those trading fees can add up.
With Robinhood, that’s not a problem. Nonetheless, I intend to buy and hold for a long time.
You might now be saying, “But that GREK poop isn’t even close to dinner! And other people’s money?!?!”
Let’s cover the other people’s money first. I invested it for my 2 and 3 year old. They don’t know any better. So that makes it good, right? Well, maybe not, but they are trusting their dad with more important things.
I’ve kept you in the dark long enough. Time for the full details. I invested more than 95% of their money in the Vanguard Total Stock Index ETF (NYSE: VTI). That’s a well-diversified investment of US stocks that many readers will recognize as a core holding.
Why didn’t I invest 100% of their money in VTI?
VTI is trading over at over $100 a share. I had less than a hundred dollars. Since buying fractional shares wasn’t allowed. I had around $80 in uninvested money.
With a brokerage that charges $10 to buy and sell shares of stock, it doesn’t make sense to invest $80. I’d need the stock to go up some 33% just to recover my trading fees.
However, because Robinhood has no trading fees, I can put that idle cash to work. Unfortunately, it wasn’t even enough to buy a share of Apple stock. I could have bought shares of another stock, but I liked the idea of gambling on GREK trading at $7. That’s 11 shares of stock.
In 2014, GREK traded around $24. I’ve been watching it for some time, simply because there are so many problems with it. I have a philosophy that a country is not likely to disappear. I believe that, given a long enough timeline, a strong beaten-down country will recover. I have several Greek friends and they are the strongest people I know.
At ages 2 and 3, my kids have the benefit of time. I’m thinking this money will help them buy a first car in 13-15 years. It can sit for even longer if necessary.
More importantly the investment is less than a hundred dollars. You can blow that kind of money on a round of drinks in New York City… and have nothing to show for it.
I’d rather accumulate shares of something that has a likelihood of appreciating, right?