My first adventure with the stock market was in 2006 at the age of 46 years old. Well, better late than never, right? Of course Lewis & I already had stock exposure in the form of mutual funds. But I wanted to learn to pick & buy individual stocks, and I spent some time cautiously exploring my options.

At that time I primarily relied on advice from a premium subscription to Morningstar. This subscription costs around $199/year now, and while I am unsure I will ever subscribe again, it was a good move for me at that particular time. Now I use other tools to help me make decisions, but I really learned a great deal from Morningstar and found it an invaluable resource.

So after a great deal of time and a few mild anxiety attacks, on April 27th, 2006 I took the plunge into uncharted territory and bought our first single stock: Microsoft.

Now comes the disclaimer: this does NOT mean I am recommending that YOU rush to buy this stock!! All I am saying is that I bought this stock, and nearly 9 years later I am happy to say we still own it. I fully expect to own it for another 10-20 years at least. But whatever single stocks we own and has does well for us does not mean I am recommending that you add it to your portfolio.

So moving on--

Microsoft was a good choice for us on many fronts. I followed those Warren Buffet rules I wrote about yesterday: I bought something of value. It is a quality stock. It has great name recognition, and I understood what the company did. It was one of the stocks that comprised the Dow Jones Industrial Average.* Microsoft was not a trendy stock, but was considered a solid buy. I knew who Bill Gates was, and it seemed to me that he did pretty well with Microsoft. So why not me?? On an ever-so-much-smaller scale??

So what could go wrong, you may ask?? Turns out there is a learning curve for so many things in life, and I shared my story of where I went wrong with this just yesterday with Aunt Sue! It made me laugh, looking back at what I did when I bought, and I want to share the error I made here today.

Let me be clear: That error had absolutely NOTHING to do with Microsoft stock itself.

So here's what I did, the ever so considerate, ever so thoughtful person I was. When I bought 100 shares of the stock for $27.08/share, I did so with extreme caution, believing I was being responsible. I bought with using a stop-loss order. Fear of losing money was a real pressing issue for me, and by God I wasn't going there! Or so I thought.

What this means is that I decided that if the stock dropped by a certain percentage, I wanted to sell my holdings to stop my losses. I felt terribly responsible that I had thought to do this ahead of time, and set up my order so that if the stock dropped by 10%, the stock would automatically sell at the lower price before it could drop any lower.

Now I thought this was a really, REALLY good idea. But I had forgotten a basic Warren Buffet rule of thumb I blogged about yesterday (even though I had followed every other idea to the letter!), which I will paraphrase here: Only buy something you'd be happy to own for many, many years. Buy good stock, and hold.

Because you guessed it: Five days (5!! That's IT!!!) after I purchased Microsoft, the stock price randomly dropped by 10%!! For no reason I could discern at the time, the stock price just fell. And my brokerage account at Vanguard did EXACTLY what I had programmed it to do: it sold all 100 shares for $24.23 each!! Aaagh!!!

So in 5 short days, I had managed to lose nearly $300 on my first ever attempt at stock investing. I was horrified. Not only was I horrified, but I was ridiculous enough to call up a rep at Vanguard to try to explain that I hadn't really meant it! I wanted my original investment back, and hadn't really meant it when I'd put in the stop order!! Needless to say the very patient & incredibly kind person I talked to thought I was pretty funny. Then I got to tell Lewis what I'd done as well. Ugh. What a way to start my investing adventures.

This story is brought to you by a person who learned the hard way that you don't buy high and sell low.

I mentioned at the start of this article that we still do own Microsoft. My decision to re-buy the very day of this debacle was the equivalent of getting back on the horse that has just thrown you. I humbly re-bought at $24.19/share, and have held ever since.

Since then, Microsoft has gone up in price, but not always. The stock price hit a crushing low on April Fool's Day 2009, trading at $14.87. I held. If I had had the resources with which to do so, that point in history would have been the time to go "sale" shopping and buy more! Just this week Microsoft hit its all time high of $50.05. As of today has evened out just a few dollars per share lower.

The target price for Microsoft for the next 12 months (according to Reuters) is a mean of $50/share, with a low of $34/share and a high of $56/share. That does not make this a growth stock or a rock star in any way. But I love the current dividend yield of 2.6%, and yes, we plan to hold for the long haul.

Happy Friday, everyone!

*Only 30 stocks are in Dow Jones Industrial Average index!! Unbelievable! It illustrates how 30 large publicly traded American companies have been bought & sold each day in the stock market. The DJIA has existed in its most current mode since 1896, and General Electric is the only stock that been a part of this index from that time on.