Journey in your mind back to March 2002. The stock market was still stumbling around in the aftermath of the dot-com crash, and retail investors were running scared. It was in that environment that Tom and David Gardner launched a monthly newsletter featuring one stock pick from each brother, with detailed explanations about why they'd been chosen -- a friendly fraternal competition that became the foundation of the Stock Advisor portfolio. The returns on those investments have well outpaced the broader market's gains in the ensuing 16 years. Had you acted on all of their recommendations, you'd have reaped a market-smashing 1,955% return overall.
Profit, however, isn't the only thing the Gardners have accrued in the intervening years. They've also figured a few things out along the way. So in this Rule Breaker Investing podcast, David shares six interesting conclusions from his 200 months selecting recommendations for Stock Advisor.
In this segment, he makes an assertion that will surprise the large contingent of folks who think that investing profitably has to be hard, or incredibly time-consuming. No, it can be easy -- in the sense of not demanding you spend an enormous amount of time watching Wall Street for just the right time to buy or sell. But there are hard parts, too, including buying regularly, even when all your emotions are telling you to hide your money under the mattress.
A full transcript follows the video.
This video was recorded on Oct. 17, 2018.
David Gardner: Conclusion No. 3: "Foolish investing is manageable, even easy." It's one thing to talk about numerical performance and how well we all have done together by being Foolish investors; investors acting by definition over the long term. The opposite of traders. True investing. And it's another thing to think about our real biggest losers.
But here's a profound, important truth for me about Motley Fool Stock Advisor, whether you've been a member for years, you just joined, or you're thinking about joining in the future. I sure hope we are delivering to you an experience that is manageable, even easy.
And what do I mean by that? Well, think about what Tom and I have done, now, for 200 months in a row. We've simply raised our hand, once a month, and we've said, "Buy this." Now some people may have listened to one of the brothers and not the other. Some people may be acting off both of the brothers' advice, and a lot of people, no doubt, are doing some of each.
But in each case, whether you just listen to one brother or two, or even if you skipped a month, all we are asking you to do is save your salary [hoping you're a net saver]. Whether you want to do it every two weeks and buy one brother's pick that week and then one brother's pick in your IRA the next two-week increment, or just once a month, that's all you're having to do, and that is a profoundly wonderful truism to share with you. That in a world where so many people think you have to be very active. They think investing is complicated, so they make it complicated.
Instead, we're there just raising our hand lazily, once a month, for years and years now saying, "I'd buy this, this month and you can, too." And so I think what we're delivering -- I hope what The Motley Fool is delivering to you, through this service and some of our others -- is simplicity. Ease of use. Just open up a brokerage account, deposit some money in it, divide it by 12 if you like, and then once every one of the next 12 months raise your hand and buy along with us, or if you're an ongoing saver [and God bless you if you are because it's a great thing to be], then every two weeks or so sock it in to the most recent pick. It's as simple as that.
Now I do want to reflect a little bit more on this point before getting to Conclusion No. 4, because I want to say to you that there are some interesting handicaps that Tom and I have had when you think about that outperformance we've generated now over almost two decades.
For example, professional fund managers who I think would love to have annualized performance like the numbers I've been talking about this podcast, professional managers can act whenever they want to. When Tom and I published a pick, we'd basically decide on it, then we'd tell our staff, and there's a publishing machination that you go through and several days later it shows up. We have no real control over what's happening in the market over those several days.
And further, every single month we're making a new pick for you. We can't say, "I don't want to pick anything. The market looks high to me this month." Or, "I love where the market is right now. I'd like to pick four." No. Instead Tom and I kind of, through the system that we co-developed with our hands somewhat intentionally tied behind our back, we're only allowed to raise our hand once a month on your behalf.
And so while what I'm saying to you may sound like a handicap, and I think a lot of people who are professionals in this field would say there are clear handicaps to how the Gardners operate Motley Fool Stock Advisor, I'm also here to tell you that in our weakness is our strength.
Because while on the one hand you might think, "Well, they can't act nearly like active fund managers would or wealth managers or money managers who are competing with them." Instead, I think, we've benefited immeasurably from the discipline of having to come up with a new best idea every single month through good markets and through bad.
I'll just focus briefly here on 2009. The market was so bad in 2009 that I didn't even want to make each of my monthly picks. I was having the experience -- maybe you were around or maybe you've had this similar experience in life -- where anything I did within the next 30 days it was down 25% or more.
It was horrific. From one month to the next, from mid-2008 to mid-2009, I felt like I was being riddled by gunfire with every single new pick that I made. It didn't feel good and I didn't want to keep doing it. And yet I did, because that's the way we've built the machine of the Motley Fool Stock Advisor and as a consequence I, and perhaps you, can now look back at the actions that we were taking in 2009 and see, "Wow! That was such a great time to be buying."
So there's something to double underline, here, about the benefits of regular, committed investing. About not worrying where the market is. About just looking and saying, "What's the best company that I've found this month to add my funds to?" Sometimes we readd back to the same company we may have recommended months or years ago, so it's not always a new idea. Most of the time, over those 200 months, it has been new ideas and for most of them we hold them for at least five years, if we can. Some a lot more than that.
But it is that regular discipline. I'm a baseball fan. It's an exciting time of year if you're a baseball fan. It's fun to watch the postseason, and I know I've used this analogy a lot on Rule Breaker Investing podcasts in the past, but I really appreciate the discipline of having to step back into the batter's box time after time over the course of a season, or a career, which is what baseball batters must do. They must step, by themselves alone, into the batter's box and keep swinging. Every single time, whatever the score is, whether their team is winning or losing.
So what looks like a handicap and what truly is handicapped in a lot of ways vs. other active professional managers has, in fact, been a great strength and it's a strength that suits you because it's much easier than being highly active. Than guessing the market. Than jumping in and out. So Conclusion No. 3 reads Foolish investing is manageable, even easy.