Motley Fool Money: How To Get Started Investing

Release Date: January 4, 2025

Introduction

In the January 4, 2025 episode of Motley Fool Money, host Mary Long, along with co-hosts Dylan Lewis and Ricky Mulvey, delves into the fundamentals of beginning an investment journey. Titled "How To Get Started Investing," the episode features insightful narratives from The Motley Fool's seasoned analysts, offering listeners practical advice, personal anecdotes, and strategic guidance to navigate the world of investing confidently.

1. Analysts' Investing Journeys

The episode opens with personal investment stories from Motley Fool analysts, illustrating diverse paths to becoming successful investors.

• Alicia Alfieri’s Early Start and Persistence (00:33 - 02:50)

  Alicia Alfieri recounts her initial foray into investing during high school. Despite her family's discomfort with investing, viewing it akin to gambling, Alicia was inspired by her AP Statistics and AP Calculus teacher who emphasized, “money doesn't grow on trees, but you can grow your money” [Mary Long, 00:33]. Convincing her father to purchase a mutual fund, she overcame familial skepticism through persistent research and daily tracking of stock movements, ultimately establishing a joint investment with her father that endures to this day [Alicia Alfieri, 02:28].

• Bill Barker’s Self-Taught Investment Path (05:11 - 07:03)

  Bill Barker shares how his first paycheck as a lawyer sparked his investment interest. Lacking formal investment education, Bill turned to influential business books like Michael Lewis's Liar’s Poker and Den of Thieves, which provided riveting narratives of the stock market's highs and lows [Bill Barker, 05:18]. These readings ignited his passion for picking his own stocks, leading him to The Motley Fool in the mid-1990s, which became pivotal in his investment education [Mary Long, 05:54].

• David Meyer’s Long-Term Vision (07:13 - 08:54)

  David Meyer's investment journey began in 1995, driven by life milestones such as marriage and the desire to secure financial stability for future goals like buying a house and retirement [David Meyer, 07:13]. Discovering The Motley Fool as a reader and subscriber, David transitioned from mutual funds to a deep-seated love for individual stocks, highlighting the importance of continuous learning and adaptability in his investment strategy [Mary Long, 08:54].

• Ricky Mulvey’s Practical Entry into Investing (09:02 - 10:02)

  Ricky Mulvey considered himself a true investor when he rolled over his 401(k) into an IRA, facing the critical decision of managing his retirement funds personally [Ricky Mulvey, 09:02]. His subsequent hiring at The Motley Fool in late 2021 immersed him in stock analysis and reinforced the Motley Fool’s philosophy of long-term investment, even during volatile market conditions [Mary Long, 09:29].

2. Building a DIY Investment Curriculum

The conversation shifts to actionable advice for aspiring investors, focusing on self-education and strategic learning.

• Alicia Alfieri: Embrace Diverse Learning Resources (11:43 - 12:27)

  Alicia emphasizes the importance of consuming a wide array of informational sources to build a comprehensive understanding of different investment styles. She advocates for stepping outside one's comfort zone by engaging with growth and value investors alike to benefit from varied perspectives [Alicia Alfieri, 11:43].

• Bill Barker: Learn from the Greats, Especially Warren Buffett (12:27 - 13:23)

  Bill recommends studying Warren Buffett’s strategies, particularly by reading Buffett's "letters to shareholders" available for free on the Berkshire Hathaway website. He underscores Buffett's enduring principles as essential knowledge for any investor aiming to build wealth over time [Bill Barker, 12:33].

• Ricky Mulvey: Start with Proven Strategies and Diversification (13:28 - 14:03)

  Ricky suggests beginners should consider index funds, likening them to the "vegetables of being an investor." He advises starting small, maintaining diversification across 25 to 30 stocks, and embracing market returns through index funds as a solid foundation for growth [Ricky Mulvey, 13:28].

3. Strategic Investment Practices

The analysts share strategies that underpin successful investing, emphasizing patience and disciplined approaches.

• Dollar-Cost Averaging and Long-Term Holding (14:11 - 14:58)

  Ricky advocates for dollar-cost averaging, encouraging investors to consistently invest a set amount monthly regardless of market fluctuations. This strategy helps mitigate the psychological stress of market volatility and aligns with the Motley Fool’s recommendation to focus on a long-term holding period of three to five years [Ricky Mulvey, 14:11].

• David Meyer on Continuous Investment and Seizing Opportunities (24:32 - 26:05)

  David advises investors to "constantly be making investments," advocating for small, incremental investments in promising companies. He cites his regret over not investing in Lululemon earlier as an example of missed opportunities due to hesitation, highlighting the importance of action over perfection in building a robust investment portfolio [David Meyer, 24:32].

4. Learning from Mistakes and Emotional Management

The episode further explores common pitfalls and the emotional aspects of investing, offering lessons to avoid similar errors.

• Ricky Mulvey’s Premature Selling (16:29 - 17:51)

  Ricky shares his mistake of selling Meta stock too soon during a downturn in 2022. Despite being initially correct about Meta's potential, his impatience to recover losses led him to miss substantial gains, reinforcing the Motley Fool's philosophy of patient, long-term investing over reactive trading [Ricky Mulvey, 16:29].

• David Meyer on Competitive Advantage and Market Hype (17:58 - 20:09)

  David discusses his oversight regarding Inventsense, where he neglected to account for increasing competition despite initial excitement over the company's technology. This experience taught him to focus on a company’s competitive advantages and market position beyond surface-level hype, aligning with his research strategy that prioritizes qualitative factors over mere numerical performance [David Meyer, 17:58].

• Alicia Alfieri on Emotional Discipline (20:20 - 21:40)

  Alicia highlights the emotional challenges of investing and the benefits of journaling to manage these emotions. She shares her experience of selling Netflix stocks to pay off student loans, reflecting on the emotional conflict between financial decisions and personal attachments, ultimately advocating for purposeful and disciplined investment actions [Alicia Alfieri, 20:20].

5. Final Tips for New and Aspiring Investors

As the episode concludes, the analysts offer final pieces of wisdom tailored to investors at different stages of their financial journeys.

• Bill Barker’s Advice for Young Investors (21:48 - 22:59)

  Bill encourages young investors to welcome bear markets and take advantage of lower stock prices for long-term growth. He advocates for utilizing Roth IRAs to maximize tax-advantaged growth over a typical 40-year investment horizon, emphasizing the benefits of compound interest and patience [Bill Barker, 21:48].

• Advice for Older New Investors (22:59 - 24:25)

  For those feeling "late to the game," Bill advises diversification beyond recent high performers and cautions against relying solely on past successes as indicators for future performance. He draws parallels to the early 2000s market conditions, stressing the importance of a balanced and informed investment approach to weather potential downturns [Bill Barker, 23:11].

• Alicia Alfieri’s Recommendations for Starting Slowly (28:15 - 29:13)

  Alicia suggests starting with small investments within one’s "circle of competence," leveraging personal expertise and interests to identify suitable companies. She also highlights the value of building a supportive community and seeking mentorship from more experienced investors to foster continuous learning and growth [Alicia Alfieri, 28:15].

Conclusion

Mary Long wraps up the episode by welcoming new investors and encouraging continuous learning and persistence. She highlights The Motley Fool's Stock Advisor service as a resource for ongoing investment guidance and emphasizes the importance of starting and maintaining an investment routine despite external pressures or self-doubt.

Notable Quotes:

• Alicia Alfieri (00:33): “Keep on showing up, keep on giving it your best shot.”

• Bill Barker (12:33): “Anybody who hasn't read a lot of Warren Buffett or has read none has got a lot of treats in front of them.”

• Ricky Mulvey (14:11): “Remember that this is a lifelong game.”

• David Meyer (24:32): “Don’t be afraid to put a little bit of money when you get an idea.”

This episode serves as a comprehensive guide for both novice and seasoned investors, blending personal experiences with strategic advice to foster informed and disciplined investment practices.