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Investing Lessons You Learned at Your Mother’s Knee… And May Not Have Noticed


Mother’s Day is a once-a-year celebration of the beautiful bond between mother and child. But most of a mother’s wisdom is imparted through common, everyday interactions. So in honor of Mother’s Day, we’re taking a look at some of those classic motherhood moments and unpacking the investment lessons hidden within them.


The Situation: Every single afternoon at around 4pm The Mom-Answer: Do your homework

The Investment Lesson: Do your research


How you do your research depends on what kind of portfolio you already have and what kind you want. The important thing is to understand your own investment needs and style: how much liquidity do you need? What are your financial goals? How much risk can you afford to take? All of these factors will influence what is the perfect risk-reward ratio for your portfolio. After that, we don’t recommend researching individual stocks and trying to predict how they’ll do. Instead, Cherries is based on Modern Portfolio Theory, which is all about finding stocks that complement each other to create an optimal portfolio.


The Situation: When you were in line together at the bank and you just couldn't stand still

The Mom-Answer: Do you have ants in your pants?

The Investment Lesson: Be patient!


Patience is one of the most important virtues of a solid investor. Put simply, you want to buy low and sell high. But did you know that many inexperienced investors end up doing just the opposite? They buy high and sell low simply because they don’t have the patience to wait out inevitable market fluctuations. Be aware of external events that cause a sharp fall in the market. These can include any kind of major financial news, like rising interest rates, natural disasters, or a change in government. Any of these events could temporarily affect your portfolio, but there is little chance they will have a significant long term effect. You’ll make more money on the stock market when you focus on long term equity growth and wait out the inevitable ups and downs of your individual assets.


The Situation: When you tried to convince your mom that doing donuts in an empty parking lot was a perfectly acceptable activity for a night out with friends

The Mom-Answer: If all your friends jumped off a cliff, would you do it too?

The Investment Lesson: Don’t follow the crowd blindly


If your coworkers are standing around the water cooler talking up a stock that is about to go public, be bought out, or launch an amazing new product, that’s probably a good indicator NOT to buy. Technology and communication companies are particularly prone to overblown media hype. It’s not that high risk/high reward stocks don’t exist, it's just that they are not the type of purchases you want to make very often. Do your research, stick with your investing plan, and make decisions that reflect your values and thinking, not those of your wild friends.


The Situation: When you told your mom you were going to skip college applications and move to New York to become an actor

The Mom-Answer: Over my dead body!

The Investment Lesson: Don’t take unmanageable risks


Stock investments are a great way to make your hard-earned money work for you. But if you don’t have the money to invest, borrowing money to purchase stocks with the hopes of striking it rich is more akin to gambling than investing. If you apply for a loan from your bank with the intention of investing that money into your portfolio, 99% of the time you’ll be rejected immediately. The same thing goes with purchasing stocks with a credit card. The vast majority of brokerage firms will not allow you to purchases stocks using a credit card.

The one way to purchase stocks with money you don’t really have is to open a margin account with your stockbroker. This allows you to borrow money from your brokerage firm, and use that money for buying and trading. Even this move is not without risks. You’ll be stuck paying high interest rates, and the chances of getting bogged down by debt are high.

What is Cherries?​

Cherries in an innovative platform for the construction of personally optimized stock portfolios. Its cutting-edge algorithms are based on groundbreaking statistical and mathematical models.

Cherries was developed by TFI Ltd.

© 2019 by Cherries