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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