One evening last week, I had after-work cocktails with some of the women from our TD Ameritrade marketing department. The Sauvignon blanc was flowing and the conversation turned to investing. “I really want to learn how to invest,” one young woman said. “I want to do what you do.”
While I’m thrilled whenever I learn of a woman interested in investing, it also frustrates me that so many are too intimidated to get started. I’d love to meet the guy who coined the term, “exchange traded funds.” Why does the financial industry have to make things sound so complicated?
So, here’s what I told my marketing colleagues: If I had their domain knowledge base — without question — I would be a smarter investor. To do what I do, I want to know what they know.
Every day, our marketers finesse the complex, fluid wheel of our digital advertising execution strategy, pulling dollars away from websites with declining performance and reallocating to those on the uptrend. They test new technologies, channels, and mediums. The data and information at their fingertips is amazing — and it can be a great base on which to build an investing strategy.
Let’s rewind to 2013: Facebook had an IPO price of $38, which over the next two quarters declined to a low of $17.55, then trended sideways. Wall Street was concerned about the overwhelming growth in usage of Facebook’s mobile app. For a company that made close to 90 percent of its revenue on advertising, Facebook was under pressure to figure out how to monetize their app via mobile advertising. Who was front and center to see if the tactics Facebook employed actually worked? Marketers. In particular, marketers with multimillion dollar and multichannel digital advertising budgets like my colleagues.
The women around our high top table knew more about investing than they suspected. Take their working knowledge of Google, which in the past year has made over $64.8 billion dollars in revenue — about 32 percent from desktop search ads, and another 32 percent from mobile search ads. TD Ameritrade does a ton of advertising with both Google and Yahoo. Every day our marketing team evaluates potential growth trends and advertising performance with these companies. They’re in a great position to observe which company is driving tech innovations that enhance conversion. Our marketing budget is going to follow whichever company is doing a better job at driving ROI. And one could easily deduce that we aren’t the only company doing this. Those are stocks I want to look into.
Here’s another example: When I recently reviewed a quarterly performance report with our marketers, I noticed one line item where an increasing chunk of our marketing spend was going to a video company called TubeMogul. The spend was not insignificant. Note to self, I thought, learn more about TubeMogul. This little company only has a market cap of $443 million. If we’re spending more there, could others be as well?
Without question, my colleagues have opinions on the companies they work closely with on a daily basis. I respect their opinions because I know they are at the top of their games. One of the most well-known investment managers of all time, Peter Lynch, urged people to “invest in what you know.” Step one is identifying the companies that you know and like — or that your respected colleagues know and like.
Will I buy all of the companies that I mentioned in this article? No. I have more research to do. For me, research gives me the confidence to believe in a company, to pull the trigger, and to sleep at night. But half the battle is just finding new opportunities to research.
My message to you is simple — shift your lens. Lean on the domain expertise of your colleagues to spot companies who are doing unique things. If they are moving the needle for you, chances are they are making a difference for other companies as well. And talk to your colleagues. Whether it’s at happy hour or over lunch, find out what they know and how can you tap into it.
To help shorten your learning curve, TD Ameritrade has extensive, interactive resources for investors of all experience levels to get educated on trading and investing.
TD Ameritrade, Inc., member FINRA/SIPC. Stock investing is subject to risks, including risk of loss. Commentary provided for educational purposes only. Past performance of a security, strategy, or index is no guarantee of future results or investment success.
Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.
Nicole Sherrod is a member of the DailyWorth Connect program. Read more about the program here. DailyWorth is separate from and not affiliated with TD Ameritrade.