I recently read The Motley Fool Million Dollar Portfolio: How to Build and Grow a Panic-Proof Investment Portfolio, which is written by The Motley Fool co-founders David and Tom Gardner. Overall the book is a fairly good read for anyone who wants to take a more active role in their investment portfolio and retirement planning.
The Motley Fool Million Dollar Portfolio sort of flies in the face of everything I blog about for Millennial’s, which is that index funds are 100% the way to go when investing and planning for your retirement. I am very anti day trader and stock picking. I wholehearted believe you’re much better off diversifying your index funds instead of picking stocks. For example, own the S&P 500, Small-Cap Value, Emerging Markets, or REITs and you have a great deal of diversification in a number of sectors and asset classes.
The Motley Fool co-founders David and Tom Gardner built their company (The Motley Fool) on being great stock pickers. However, they are not day traders whatsoever. They are long term investors who try and invest in great companies for the long term, with the hopes of beating the market (the S&P 500). They actually have a great track record of doing so.
I regularly listen to three of The Motley Fools podcasts and that is what intrigued me about this book. I believe their podcast are a fantastic listen for all Millennial’s who want to continue their education on money, investing, and personal finance. I did glean some good stock picking insight from The Motley Fool Million Dollar Portfolio: How to Build and Grow a Panic-Proof Investment Portfolio and I think all you Millennial’s can as well.
David and Tom Gardner didn’t convince me to switch from index funds for my retirement portfolio though. I plan to “consider” investing in some individual stocks at some point down the line, but right now I am happy investing the way I am. I read Jack Bogle’s book The Little Book on Common Sense Investing and his philosophy is obviously index funds, considering he is the founder of Vanguard, my absolutely favorite brokerage account. But he doesn’t encourage all investors to have a small amount, roughly 5%, allotted to stock picking or anything else you consider “fun” in your investment portfolio. I side with Bogle on this one. But I’ll probably hold off even longer before I buy my first stock.