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075 | The Unfair Advantages Of The Individual Investor | Brian Feroldi

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:

Rich Dad Poor Dad

The Motley Fool Investment Guide

Warren Buffet and the Interpretation of Financial Statements

Motley Fool Podcasts

Morgan Housel: The Collaborative Fund

Getting Rich: from Zero to Hero in One Blog Post

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