Jack Kellogg was only 19 and working as a car valet when he first heard about stock trading from a friend and decided to invest money in the market to make a profit. Watching his parents struggle financially instilled in him the goal of becoming economically secure beyond just earning a paycheck.
Kellogg's desire to solve his family's money problems drove him to invest and create wealth at a young age. In 2017, he opened a trading account, deposited $7,500, and began trading, only to lose hundreds of dollars immediately. This initial loss made Kellogg realise that investing in the market was not as simple as his friend had suggested. However, instead of being discouraged, he spent his days learning from podcasts during his car valet shifts.
Kellogg learned about trading from online experts and practised their strategies in trading simulations to backtest his methods. When he resumed actual trading, he made significant profits during the bull runs of 2020 and 2021, earning $1.6 million and $6.5 million, respectively. Despite facing substantial losses in 2022 amid a bearish market and macroeconomic uncertainty, Kellogg's adaptability allowed him to continue making gains.
Learning from Setbacks
The initial setbacks Kellogg faced were instrumental in shaping his approach to trading. He quickly realised that a successful trading strategy requires a solid understanding of market dynamics and staying updated with the latest financial news. Kellogg started to follow reputable financial news sources, analyse market trends, and attend webinars hosted by seasoned traders. He also leveraged various online resources to enhance his trading knowledge.
In the past year, Kellogg focused on trading in the AI-driven stock market. Riding the market rally, he transitioned from day trading to swing trading, holding trades for days or weeks instead of closing them within minutes. According to Business Insider, Kellogg made $10.5 million in profits from 2020 through 2023. Understanding the importance of diversification, Kellogg invests his day trading profits in index funds and exchange-traded funds (ETFs) to mitigate market risks and gain broader exposure to US firms across various industries.
Kellogg's Long-term Investment Strategy
Kellogg primarily invests in ETFs and index funds tracking major US indexes. He invests in the MainStay VP S&P 500 Index Fund, gaining exposure to the top 500 US companies across the finance, IT, and healthcare sectors. Other ETFs with low fees and diverse exposures that Kellogg favours include the SPDR S&P 500 ETF (SPY), the Vanguard S&P 500 ETF (VOO), and the iShares Core S&P 500 ETF (IVV). These funds provide Kellogg with diversification, low fees, and high liquidity, making them ideal for long-term investment.
He also invests in the MainStay VP Small Cap Growth and the DWS Small Mid Cap Value funds for exposure to smaller US firms, similar to the Russell 2000 Index, which tracks the smallest US stocks. While investing in small-cap firms carries higher risk, it also offers the potential for higher gains than large-cap stocks. This balanced exposure to small-cap and large-cap stocks has helped Kellogg outperform the overall market.
Investing in International Markets
For non-US stock exposure, Kellogg prefers the Fidelity VIP International Index, which tracks global brands like Taiwan Semiconductor Manufacturing Co., Samsung Electronics, and Shell. Kellogg advises against picking individual stocks for long-term investing, believing it is more prudent to invest in diversified funds. He states, "The SPY is 500 of the best companies in the world...people who don't know much about investing should never just pick one stock or read about one stock online."
Practical Tips from Kellogg's Experience
Kellogg's disciplined approach to trading and investing demonstrates that financial goals can be achieved with dedication and intelligent strategies. Here are some practical tips for those looking to succeed in the stock market:
- Start Small and Learn: Begin with a small investment and focus on learning the basics of trading and investing. Use resources like online courses, webinars, and financial news to build your knowledge.
- Practice with Simulations: Before diving into actual trading, practise with trading simulations to test your strategies and understand market movements.
- Diversify Your Portfolio: Avoid putting all your money into a single stock. Instead, diversify your investments across different sectors and asset classes to mitigate risk.
- Stay Informed: Regularly follow financial news and market trends. Stay updated with the latest economic, political, and industry developments to make informed decisions.
- Be Patient: Investing is not a get-rich-quick scheme. Be patient and focus on long-term gains rather than short-term profits.
- Automate Payments: To ensure consistent investment and savings, automate your payments towards investment accounts. This strategy helps in maintaining financial discipline.
- Manage Risks: Always be prepared for market fluctuations. Have a risk management strategy to protect your investments during market downturns.
Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.
