Experienced investors and financial analysts, Asit Sharma, Meilin Quinn, and Matt Argersinger discuss Foolish investing in 2024, including the principles of a foolish portfolio, researching and selecting stocks, and the macro landscape. They also explore opportunities such as investing in Disney and potential buying opportunities in EPR Properties and The Hershey Company.
Foolish investing involves identifying great businesses with long-term opportunities and holding stocks for a minimum of five years, emphasizing founder-led businesses and making a difference in the world.
Diversification is a key aspect of Foolish investing, with the recommendation of 25 to 30 stocks in a portfolio to increase the probability of outperforming the market and mitigate risks.
Deep dives
Investor sentiment in 2023 vs 2024
In 2023, investors approached the market with caution, leading to surprises and a market outperformance with any hint of positive news. However, going into 2024, investors are more optimistic due to a strong market run, decreased inflation, and better overall sentiment. This optimism is justified, but it raises concerns about potential overexcitement.
The principles of Foolish investing
Foolish investing involves identifying great businesses with long-term opportunities, emphasizing founder-led businesses and holding stocks for a minimum of five years. Diversification through at least 25 stocks is encouraged, as well as participating in innovation and making a difference in the world. These principles are based on the belief that investing in strong businesses with a long-term focus yields positive results.
The importance of diversification in investment portfolios
Diversification is a key aspect of Foolish investing. The Fool recommends a minimum of 25 to 30 stocks in a portfolio to increase the probability of outperforming the market. This approach is based on the Pareto principle, where a small number of stocks have a significant impact on returns. By diversifying with a sufficient number of stocks, investors can mitigate risks and increase the likelihood of capturing the potential returns from a few standout performers.
Knowing when to sell a stock
Knowing when to sell a stock depends on the investment thesis and whether it remains intact. If the initial reasons for investing in a company change or no longer hold true, it may be time to consider selling. Investors should monitor the performance of their investments, evaluate if the original thesis is still valid, and make decisions based on the company's progress and overall market conditions.
Whether you’re a seasoned investor or just starting out, consider this your “start here” guide for Foolish investing in the year ahead. Mary Long talks with Asit Sharma, Meilin Quinn, and Matt Argersinger about:
(01:02) Fool Rules,
(12:53) investing tools,
(21:28) and what the year ahead might (or might not) have in store.