Brian Feroldi talks through the advantages and disadvantages of individual investing, the realistic expectations for performance, and his strategies for beating Wall Street.
- How did Brian find the FI community?
- How did Brian start investing, and how has his strategy changed?
- Brian still focuses his investments on index funds, but has found that well researched and intentional investment in individual stocks can be really successful.
- Professional money managers operate under different parameters and mindsets than an individual investor.
- Stockbrokers must make decisions based on short-term returns.
- What other disadvantages do professional money managers face, in contrast to individual investors?
- How do professional money managers truly spend their time and earn their money?
- How much time will the average person commit to building a stock portfolio?
- How many stocks should a beginner buy to start building their portfolio?
- What information does Brian consider prior to purchasing a stock?
- Keep an investing journal to record the reasons you want to invest, and then compare as returns come in, to ensure that those reasons remain true.
- Don’t buy into any businesses you don’t understand.
- Brian relies heavily on summaries from monthly Motley Fool newsletters, among other “outsourced” research sources.
- Brian’s 7-year-old son just bought his first stocks – which one?
- How does Brian make monthly decisions about the stocks in his portfolio, and what is the time frame he considers before purchasing?
- What are some reasons to sell a stock?
- Why don’t all your stocks have to be winners?
- If someone purchased 10 stocks, a realistic goal for individual investing is to beat the market with 4 or 5, and hit a home run with 1.
- Brian talks about Priceline and Netflix as examples of how individual investors can beat out Wall Street.
- What resources would Brian recommend to a newcomer to the stock market?
- What steps should someone consider prior to getting started?
- What makes a good company?
Listen to Brad and Jonathan’s thoughts about this episode here.
Resources mentioned in this episode:
The Motley Fool Investment Guide
Warren Buffet and the Interpretation of Financial Statements
