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9 "Self-Evident" Foolish Truths, No. 4: Invest With the Wind at Your Back

By Motley Fool Staff - Updated Oct 30, 2017 at 7:06PM

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To build your wealth, you can spend your energy “rowing,” or you can hoist your sails and let the natural energy of the market universe help you get to where you want to go.

This week is the 120th Rule Breakers podcast, and as Motley Fool co-founder David Gardner looked back, he realized he's covered a whole lot of subjects in those shows. More to the point, with all those episodes behind him, there are some areas he may not have covered in detail in a while. So he's getting back to basics with a set of ideas he thinks any Foolish investor ought to take for granted -- because he's not taking it for granted that everyone knows them.

In this segment, he discusses a bit of advice from Wall Street icon Jack Bogle, who defined "Rowboat Syndrome": the idea that if you're paddling toward your future in the proverbial rowboat, you're looking toward the past. He prefers a metaphorical canoe. That's better, says Gardner, but better still is to use a metaphorical sailboat.

A full transcript follows the video.

This video was recorded on Oct. 11, 2017.

David Gardner: Point No. 4.

Foolish Self-Evident Truth No. 4: This is the lovely phrase the "Rowboat Syndrome," which I swiped from Jack Bogle as I've swiped many other great lines and stories from the Vanguard founder, the investing master, and great friend of the Fool. The rowboat syndrome.

I always say don't do this if you're driving. Raise your hand -- raise both hands -- if you know what the rowboat syndrome is and I'm guessing a minority of us have both hands up right now and nobody who's driving is doing this.

Here's the way I'll put it to paraphrase Jack a little bit. As we're paddling down the river of life as investors, which direction should we be looking? Do you want to be in a rowboat? Most of the rest of the world is, because when you paddle the rowboat you're looking backwards. So many market commentators and just our fellow humans -- forget about the stock market -- are fixated on that rearview mirror. They're just looking backward as "paddle, paddle, paddle" they go forwards through time down the river of life.

I've always said, "Toss away your rowboat and take a canoe," because when you take a canoe you're facing forward and you recognize that all that really matters is what comes next around that bend in the river as you "paddle, paddle, paddle" forward looking the right way. So, as an investor you're going to not spend too much time looking backward but ask where things are headed and getting your money aligned right there.

But I've also said, to close point No. 4, toss away your paddle and kick away that canoe because there's a much more efficient way for you to go down this breezy stream and that's with a sailboat. The beauty of the stock market, as anybody who's studied it knows, is that it tends to rise 8-11% or so annualized over long periods of time.

That is the wind at your back. What an absolutely awesome trip it is that you and I get to be on as investors [coming up is point No. 5 very shortly]. As investors, what a great trip to think that we can just sit there in the boat and let the wind push us forward, occasionally tack when needed, enjoy the sights, and have fun getting rich together as the winds push us forward.

In fact, when I think about the paddlers in their canoes, that feels a lot like trading to me. That feels a lot like day trading. A lot of effort and not nearly as much reward as just sitting there in our Foolish sailboat. Point No. 4.

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