9 Investing Basics From an Early Retiree

Fellow Fool Mary Ivy gives nine investing basics.

May 16, 2014 at 9:43AM

Mary Ivy practiced as a family doctor before she retired in 2012 -- at the young age of 53.

Mary's Fool Story started back in 2000, when she began investing. She chose The Motley Fool because she liked its emphasis on long-term investing in thought-out companies, as well as the Fool's focus on living within one's means. Mary's mind-set about the stock market reflects hers and the Fool's penchant for long-term investing: "When you purchase stock in a company, you need to anticipate and accept that the price will fluctuate." But all people have those moments in investing when they just want to pack up and cash out.

During Mary's 14 years of investing, she has learned a lot and often helped others on the message boards in moments when the stock market dipped. In 2013, she did just that when she helped a fellow investor by writing out her nine basics of investing:

I have been investing since 2000 and often had days/weeks/months where I felt the same, but just stuck to my plan of investing as much money as I could in what I believed to be great companies with the ultimate goal of being able to retire early. Well, by sticking to my plan I was able to retire last year at the age of 53. 

Some investing basics I learned here and have followed:

1. Do not invest any money you cannot afford to lose.
2. Quality, not quantity, is what is important -- do not worry if you can only afford one share of a company.
3. Invest in what you know/believe in. When stock price goes down, you want to buy more, not sell.
4. Diversify.
5. Have patience. Give time for stories to play out.
6. Measure your performance 
7. Know what factors affect your company's performance -- for example, the relationship between oil prices and airlines. This can help in your diversification by hedging, so if own an airline stock, you should also own some oil company.
8. Have a vision of the future. Be in the moment but visualize a better future. Balance future with the present and do not focus on the past.
9. Management of company is key, so look for passion.

I believe having a goal is crucial. This sounds easy, but it is not. It takes some serious soul-searching.

The investing basics that Mary learned while investing at The Motley Fool well parallel what the Fool is founded on, especially when it comes to diversifying and holding. In fact, in a 2013 interview with co-founder David Gardner, he asked: "How often do I look back and find my best investment decisions were simply to hold?"

There aren't any secrets to investing, yet Mary has Foolishly invested with success by focusing on the future, investing in quality companies, and seeing the market's opportunities. She recently elaborated on her market mind-set by explaining, "If you have a well-diversified portfolio of companies you understand, you are excited about, and plan to hold for the long term, you will look at price drops as opportunities." 

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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