Recapping My 2023 Investing Journey – A Year of Learning and Doing

It is always good to do self-reflection. Good to see what you accomplished, where you failed and succeeded, and what you can learn moving forward. This short post will be recapping my 2023 investing journey.

Opened a Roth IRA – Investing for Retirement

While 2022 was the year I decided I wanted to get serious about investing, I still knew so little about investing. 2022 was a year of learning. Mistakes were made. If you’re a glutton for punishment…or want to learn what NOT to do, here is a post on My Biggest Investing Mistake.

But as 2023 rolled around, I was ready to be more serious and start with a strategy. The first step was to open a Roth IRA.

Why did I open a Roth IRA?

Until this point, I had only been investing in my 401(k). And don’t get me wrong, 401(k)s are great! However, taxes are deferred now and I will pay them later in retirement. I figure I could offset some of those taxes in retirement via a Roth IRA.

Quick refresher: Roth IRA is an Individual Retirement Account where you contribute earned income and it grows tax-free. When I am ready to withdraw from this account, I will not have to pay taxes.

At this point in my career, my 401(k) is much larger than my Roth IRA. In 2023, you could only contribute $6,500 to a Roth. I’ve been investing in a 401(k) since I was 24 years old. That account has grown by over $180,000. A 13-year head start in my 401(k) will make it very hard for a Roth to catch up.

But again, the reason behind opening the Roth IRA was to help offset taxes, even by a small amount. Whenever you can, you NEED to take advantage of tax benefits.

Swing Trading – Exploring Other Uses of the Stock Market

While I’m super serious about investing, I wanted to explore a little more about the stock market. After all, there’s so much you can do. Day trading. Swing trading. Futures trading. Options trading. More I’m probably missing. It is all about learning more.

Now, I do have a day job. I need that 9-5 income to be able to invest and…live. That means I don’t have all day to sit in front of a computer to day trade watching little movements. And Futures and Options seemed more complex and I would need even more time to learn that. I’ll start with baby steps.

Swing trading seemed like a happy medium.

Swing trading is a “long-term” version of day trading. You look for trends and patterns of a stock, try to determine when it hit certain zones, referred to as Supply-Demand, and try to ride the momentum up and down. You could be in trades for weeks or months versus days.

Swing Trading – Performance and Thoughts

Overall, the account I was using for Swing Trading had a similar performance as the S&P 500. But I experienced a LOT of ups and downs.

I wrote an article on the Pros and Cons of Investing versus Trading, where risk was a big differentiator. While swing trading, I had winners and losers. It hurt and it felt good.

Swing trading is a lot more work than investing. Not only do you have to buy/enter at the right time, but you also need to know when to sell/exit your trade. With investing, I’m investing for the long run. Buy and hold.

I didn’t throw a ton of money at this. I would trade maybe 1 share, or $100 at a time. I used this as a learning opportunity. Once I get more experience under my belt, could this also be another income stream?

Will I keep swing trading in 2024? Maybe? Probably. I did find it fun. I learned some technical chart reading, and I discovered more companies that don’t normally pop onto my investing screeners. But the biggest learning came from how I handled my emotions and feelings around risk, gains, and losses. Sometimes you have to do, to learn.

Increasing my Emergency Fund – More Important than Ever

Something else I focused on in 2023 was increasing my family’s emergency fund.

I found it’s more important than ever. If you haven’t read my About Me, you should know that I am married and have 3 children and a dog. And with life getting more expensive lately, just google “inflation”, and you’ll see that providing for a family of 5 can be quite expensive. In my mind, I kept thinking about, “What if something happened to me?” Or to my wife (we are a dual-income family.) We wouldn’t want to go into debt if there was a big emergency.

With talks about recessions, inflation, and wars, 2023 had a lot of potential outlooks where every family should have some protection.

Building and growing an emergency fund should have been on everyone’s to-do list in 2023 (and beyond). And if you’re not exactly sure why you need an emergency fund, read my article on the 7 Reasons Why You Need an Emergency Fund.

I Opened a High-Yield Savings Account – Grow Some Passive Money

One of many reasons to invest your money in the stock market is because you get absolutely nothing for putting your money in a savings account. For the most part, banks and credit unions have a savings interest rate of 0.01% APY, with a nationwide average of 0.56% APY. You are loaning out your money to the banks in return for nothing.

That has changed.

With “the Fed” increasing overall rates, borrower’s loan rates have increased across the board (auto, mortgage, personal, etc.) A side effect of this increase is that many banking institutions have raised their savings interest rates, some higher than 5%!

Everyone who has a savings account should take advantage of this, and I definitely did. My wife and I opened a high-yield savings account (HYSA) through Apple (technically Goldman Sachs.) We are now earning 4.25% APY on the cash we have saved there.

While investing in the stock market still makes more sense long-term (8%-10% annual returns), we need a place to store our emergency funds. Emergency funds should be liquid, and accessible at a moment’s notice. Therefore, the stock market isn’t the best place for an emergency fund…but a HYSA, yes please!

2023 is Over, What’s in Store for 2024?

2023 was a great year! I learned so much on my investing journey.

Would I say I am a Level Zero Investor anymore? No. I’ve definitely leveled up. But there is so much more room to grow!

In 2024, I want to:

• Read more
• Write more
• Research more companies
• Continue to invest
• Continue to add to my emergency fund
• Educate
• Help other Level Zero Investors level up

Do you want to learn more about what I experienced above? Below are links to articles that shaped my 2023:

• Learn about Roth IRAs and other Types of Brokerage Accounts
• Read Pros and Cons of Trading vs Investing
• Read the 7 Reasons Why You Need an Emergency Fund
• See how you can make your money work hard with High-Yield Savings Accounts

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Thanks for reading!

What did you accomplish in 2023? What are your plans for 2024? Leave a comment below!

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Disclaimer

Levelzeroinvestor.com is not a registered investment, legal or tax advisor or a broker/dealer. All investments / financial opinions expressed by Levelzeroinvestor.com are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.