Some foolish wisdom picked up.
7 Ways to Be a Smarter Investor by Motley Fool, saved here as the internet is volatile
From the beginning, Motley Fool co-founders David and Tom Gardner have stood by seven core principles of investing — principles that have helped them earn market-beating returns over the long term.
We want you, as our investing partner, to share in those returns.
So we're asking you to embrace these seven principles. Whether you're a new investor buying your first stock or have been in the market for decades, these ideas won't steer you wrong. They're the bedrock of Foolish investing, and we think you can profit with them for years to come.
Principle No. 1: Buy Businesses, Not Tickers
This one is straight from the mouth of famed investor Peter Lynch, who generated 30% annual returns while at the helm of Fidelity's Magellan mutual fund. At the Fool, we buy into a company's prospects, its future, and its management. We're not interested in trying to divine value from a stock chart, and we don't blindly invest in a hot industry. We prefer to put our money alongside a company we believe will generate shareholder value over the long term.
Principle No. 2: Be a Lifetime Investor
We're long-term investors who believe in capitalism and thriving industry. But we don't just buy our stocks and forget about them. We keep tabs on them, follow the news, study the earnings reports, and strive to learn more about the industries. We also add money to companies we continue to love, so we're continuously saving and investing.
Principle No. 3: Diversify
We believe in building a diversified portfolio, much like Walter Schloss, who generated astounding annual returns during his lifetime and held nearly 1,000 securities. We need not own that many stocks, but a diversified portfolio protects us from the inevitable blips — and allows us to sleep well at night.
Principle No. 4: Fish Where Others Aren't
We're not interested in following the crowds. We are interested in thinking for ourselves, doing our own research, and making our own decisions.
Principle No. 5: Check Emotions at the Door
We recognize that stocks will move up or down for a variety of reasons — and often these movements happen daily. We manage our temperament and don't let our emotions affect our decisions. If stocks we like dip for an unjustified reason, we'll load up rather than sell out.
Principle No. 6: Keep Score
We believe in accountability and have tracked our positions from the get-go. Day or night, you can find the performance of Motley Fool recommendations on our websites. Does your broker do the same?
Principle No. 7: Be Foolish and Have Fun
People are conditioned to believe that investing is too difficult for the average Joe saver — and that money issues are best left to the professionals. But we believe you can do it better than your broker — and we think you should have fun along the way.