I felt that this thought should be put out in the open. Hopefully I won't be slammed for presenting the query "Are the Fools still fools?" I concede that the Gardner brothers have done a great service to the general community, but I wonder if what they're adding to their on line portfolios would otherwise be too risky for the average "fool". And, I wonder what they're adding to their offline portfolios (bonds maybe? Worse, Government bonds?) Yes, I know- they say their purchases are not buy recomendations, but is that truly accurate. As the Fools and their Kingdom grow into the tens of millions by selling books, magazines, newsletters, and advertising, I wonder if their ideas may actually be speculative and risky (I'm sure the on line portfolios are only a tiny fraction of their total net worth- and therefore, less important and easier to take risks with). I'm just putting this thought out there and would like to hear from the rest of you. It's just a thought- not what I may or may not actually belive. Fool on!
BigShoes,Thanks for the note. Although I disagree with your concerns, it's great that they're expressed so that we consider what is and isn't risky for investors.I continue to hold 100% of my long-term savings in the stock market -- in my online portfolio and in my personal portfolio. The Rule Maker Portfolio just doesn't look very risky to me, with Microsoft, Pfizer, Coke, Cisco, Gap, Intel, etc. I think this is entirely appropriate for any investor with a minimum five-year time horizon (as we've outlined in our books, on the radio and here online). We simply do not believe that our investment ideas are applicable to folks with less than a five-year investment horizon.On the Rule Breaker side, naturally there's more risk. But I think the returns of that portfolio speak for themselves -- they are conveniently forgotten by many of our critics. This portfolio has outperformed virtually every single mutual-fund in America over its five years of existence. It does bring with it more volatility, but I also think it's appropriate for someone with a five-year time horizon and the stomach lining to endure 20% gains or losses in a single month.In the end, our forum is an open forum. . so our ideas carry a certain amount of weight, but don't carry the forum. The majority of content created on the site each day is created by individual users, sharing their individual ideas and concerns about investing. Thus, the forum is really driven by the people for the people. Our editorial overlay, I think, is extremely valuable. But we don't operate as the traditional media does -- with no public accountability. Were the environments the same, do you think we'd be seeing Mario Gabelli on Squawk Box each week? Hmmmmm.So I appreciate your concern, glad you voiced it. I'll be interested to see the responses. That said, I think we've done a fine job here of outlining the potential risks and rewards of investing in common stocks, in ways that no other financial service online or offline has. Thus, it's up to the people to decide. . and the growth rate in the user base of our service indicates to us that folks are taking value from fool.com. Time will tell, of course. But I expect the patient among us will be very satisfied twenty years from now.Fool on, and again, thank.Tom Gardner
"I'm sure the on line portfolios are only a tiny fraction of their total net worth- and therefore, less important and easier to take risks with). I'm just putting this thought out there and would like to hear from the rest of you. "BigShoes,I have wondered this sort of thing myself. However, I keep coming back to the fact that the Brothers Fool have done a lot for me and for many others. They have taught us how to manage, and take responsibility for our own retirement accounts.And they have taught us to do it in SAFE ways. (i.e., index funds and the foolish four) As part of the education process it is NECCESSARY to learn about riskier investments, but no one said you had to participate in these.Granted, I am still rather new to this. I have most of my money in two foulish four portfolios. I also have about twenty percent in some of the rule breaker stocks (which are currently KILLING my portfolio). ButI have learned to be patient and not panic. For that I owe a great debt to Tom and David. As for their portfolio....I'm sure they hold stocks not listed in any of these portfolios. Some riskier, some less. You can only put so much money in one place. Had I their money, I wouldn't want controlling interest in GM. Just a certain percentage of my portfolio.So, remember one of the first rules of the foolish, (I forget which one) "Put your money where you can be comfortable with it. The idea is to sleep at night!"Fool on,jgspitz
The value to me has been communicating with Fellow Fools, who have helped me to become more patient in my investing.I'm not invested using any of the Foolish methods, but I am very satisfied with the kind of advice the Brothers Gardner and their minions offer.I am very impressed by their books, and I think most Americans would learn a great deal (and be highly entertained, to boot) from them about basic saving and investing.I'm happy to stick up for them when newspaper columnists take swipes at the Fool, and just hope that they will remember me in their will.-Steve
I too feel a great debt of gratitude to the Bros Gardner. I am a young investor with a long outlook towards my retierment. Unfortunately my elders tell me I have more money then brains at this time. I am glad to see real money portfolios rather than investment guys attempting to sell me the next big thing. I think it doesn't matter how much of the Fools money is invested like the published portfolios. It is only to risky if you are to worried about your investments. Sell to your sleeping point, then don't worry.
I feel the Brothers have done a great job on educating investors. Me included,But I am puzzled why the Foolish four is in the rule breaker portfolio. It seems to me, these four dow stocks aren't rule breakers and don't thematically fit with the other stocks. Why have the follish four in this rule breaker portfloio when they aren't rule brekers?
eduffy wrote:Why have the follish four in this rule breaker portfloio when they aren't rule brekers?Two reasons that I can see:1)Stability. Rule Breakers are inherently volatile, so putting in the FF stocks can help dampen down the fluctuations a little, as it is a real money portfolio, not a model as you see in magazines and tip sheets.2)Responsibility. Despite the regular pleas of Fools for people not to blindly follow the Fool Portfolios, many still do, so by including the FF stocks, those fools (with a small f) who blindly invest are forced to get a bit of diversity of investment styles.Hope this makes sense.angussb.
One of the best articles I've seen regarding the volatility (and risk)of stocks is Peter Lynch's "Fear of Crashing" in the September 95 Worth magazine. His basic message is that although being invested in stocks carries a risk, the bigger risk is NOT investing because of a fear of crashing. He goes through the big up & down moves in the market since 1954, demonstrating that if you were out of the market (because of fear) for the 40 most profitable months over the 40 years from 1954-95, your return drops from 11.4% to 2.7%, and your savings account outperforms your brokerage account. Bottom line: Put 100% of your money in stocks and keep it in.I've followed this advice successfully since 1995. In fact, I don't even keep an emergency fund - I have the largest home equity line of credit possible, and I use it as my emergency fund, allowing me to keep my emergency $s invested.
I've followed this advice successfully since 1995. In fact, I don't even keep an emergency fund - I have the largest home equity line of credit possible, and I use it as my emergency fund, allowing me to keep my emergency $s investedIs an Emergency fund of 3 - 6 months in a Money Market Account necessary? I believe this is quite a bit of money that could be put into the Stock Market. Please advise.Bernie
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