Latest news with #TomGardner
Yahoo
a day ago
- Business
- Yahoo
CEO Tom Gardner: No Day Trading -- Hold Everything at Least 12 Months
Key Points Day trading takes a lot of time and effort, and in the end most people will wind up losing money. Institutional investors always have more information than a day trader relying on technical analysis. These 10 stocks could mint the next wave of millionaires › Motley Fool CEO Tom Gardner recently sat down for an interview in which he discussed investments that people should avoid, particularly when first starting out on their investment journey. Among his tips was a word of caution about the practice of day trading. Day trading is a method of picking and choosing stocks by attempting to time trades by recognizing specific technical indicators, such as Bollinger Bands, the Relative Strength Index (RSI), and moving average convergence/divergence, among others. Day traders move in and out of positions regularly, as opposed to buy-and-hold investors who invest with a long time horizon. If you think day trading sounds difficult, you're right. According to more than 85% of day traders fail in their first year, and only 10% to 15% report making any money at all. So, it's no wonder that Motley Fool's CEO issued a warning against day trading. In a June 2025 article, he said: You will not day trade. You will not actively trade anything. Anything you buy, you must hold for at least 12 months. I have to get you in for 12 months. ... If you can find Costco early on and just hold it, you're going to become a millionaire. Day trading Costco, there's just a tragedy of epic proportions. The dangers of day trading Day trading is a really hard way to make money. If you're going to try to be a day trader, there are several challenges you'll have to overcome. Timing the market: This refers to the philosophy of buying low and selling high. Sounds great in theory, but in reality, market timing is extremely difficult, if not downright impossible. According to Hartford Funds, 78% of the stock market's best days from 1995 to 2024 occurred either during a bear market or during the first two months of a bull market. And if you missed out on the market's 10 best days in that period, your returns were cut by 54%. Transaction fees: Sure, brokers like Robinhood offer commission-free trades. But day-traders can also lose money through a practice known as payment for order flow. The broker sells their orders to third-party market makers to handle the trades. The market makers, which process huge numbers of trades each day, execute the trade and get a profit from the bid-ask spread, which is the difference between what someone is willing to buy a stock for and what someone is willing to sell it for. The day trader gets a slightly worse price -- and the costs for that type of transaction can add up quickly. In addition, according to Gardner, day traders will never be able to compete on a level playing field with institutional investors when it comes to "the costs, the taxes, and the fact that unless you have an incredible amount of money to build the most high-powered frequency trading system in your home, you're going to be behind others in institutions that are trading faster than you," he said. "You are always going to be a loser." Stress: Yes, day trading can be incredibly stressful. You have to be on your game every day -- and pretty much for the entire trading day -- to try to identify and take advantage of opportunities (keeping in mind that you're playing against a stacked deck). That's a lot to handle for a career in which only 4% manage to make a living. Alternatives to day trading Instead of trying to time the market in a task where you're nearly guaranteed to lose, first-time investors should instead follow the Warren Buffett approach to investing: Seek out quality businesses with a distinct competitive advantage and reliable earnings. Those are the kinds of businesses that you can buy and hold for a long time. As Buffett, the longtime CEO of Berkshire Hathaway, once said, "Our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint." And Buffett knows what he's talking about. Berkshire's portfolio gained 5,502,284% from 1965 to 2024, far outdistancing the S&P 500's gain of 39,054%, which includes dividends. Another ideal investment strategy is dollar-cost averaging, which is the practice of splitting your investment into a series of transactions over a set period of time. For instance, if you had $50,000 to invest in Microsoft, you could buy $10,000 of the stock every Monday for five weeks. This removes the uncertainty of market fluctuations and any attempts to time the market, as your investment is on a set schedule. These strategies are better than day trading and would give investors a better chance to get richer and one day enjoy a stable, happy retirement. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $433,181!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,702!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $641,800!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of July 21, 2025 Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Costco Wholesale, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. CEO Tom Gardner: No Day Trading -- Hold Everything at Least 12 Months was originally published by The Motley Fool
Yahoo
12-07-2025
- Business
- Yahoo
Motley Fool CEO Tom Gardner: S&P 500 (VOO) at 25× Earnings Is Stretching Valuations
Motley Fool CEO Tom Gardner is worried that the "market" is a bit stretched valuation-wise. Gardner thinks there are still investments worth making, but you have to look where others aren't looking. Value stocks, international stocks, and dividends stocks all offer opportunities in Gardner's eyes. 10 stocks we like better than Vanguard S&P 500 ETF › The S&P 500 (SNPINDEX: ^GSPC) went through a correction, a drop of at least 10%, but less than 20%, in early 2025. But as July got underway, the index is once again near all-time highs. The average price-to-earnings ratio of the Vanguard 500 Index ETF (NYSEMKT: VOO), an S&P 500 tracker, is around 26x, which is lofty. But Tom Gardner, CEO of The Motley Fool, still sees pockets of opportunity. Here's where you should be looking for good investments. The S&P 500 is a curated list of the 500 largest publicly traded companies in the United States, selected by a committee at S&P Global, and meant to be representative of the broader U.S. economy. The companies in the index tend to be well-known businesses that are economically important. But how exactly is the index constructed? It is a market-cap weighted average of the stock prices of these 500-odd stocks. First, with only 500 or so stocks in the index, it clearly doesn't include every single stock that makes up the market. So there are plenty of investment options outside the S&P 500 index. And even within the index, there are stocks and sectors that are performing well, and those that aren't. The average of the good and the bad is what you see in the single index number, which, because of the market cap weighting, is driven most by the largest stocks in the index. This is how Tom Gardner can say that the S&P 500 index suggests the market is expensive and, at the same time, suggests that there are still pockets of opportunity for investors to exploit. In a recent interview, Motley Fool CEO Tom Gardner specifically suggested three investment areas that might still offer long-term opportunity: value stocks, foreign stocks, and dividend stocks. Here's a quick way to dig into each one. Meanwhile, Gardner also asserted that if you aren't into buying and selling individual stocks, you should probably be looking at exchange-traded funds (ETFs). In my view, both pieces of advice are extremely relevant in today's market conditions. However, if you are leaning towards investing in ETFs, why not invest in ETFs comprising stocks that are generally overlooked? In other words, why not invest in ETFs specializing in dividend stocks, value stocks, and international stocks? On the value side of things, you can go broad and buy Vanguard Value ETF (NYSEMKT: VTV), or hone in on the S&P 500 stocks with Vanguard S&P 500 Value ETF (NYSEMKT: VOOV). There's some overlap between these two index tracking ETFs, in that Vanguard Value ETF is focused on large companies, and so is Vanguard S&P 500 Value ETF. However, using the S&P 500 as a base list of investments adds a screening layer that ensures the companies included are both large and economically important. They have performed similarly over time, as the chart highlights. That said, a look at the top holdings of either one of these value-focused ETFs could help you start your search for individual stocks. ExxonMobil (NYSE: XOM), Procter & Gamble (NYSE: PG), and Johnson & Johnson (NYSE: JNJ) are in the top 10 of both ETFs and might be worth a deeper dive. Note that all three are reliable dividend payers, too, which keys in on Tom's advice to look at dividend stocks (more on this below). On the international front, investors could go with Vanguard Total International Stock ETF (NASDAQ: VXUS). Given the complexity of buying foreign stocks, it is probably best to stick with an ETF on this front, and a broad-based option like this one covers a lot of ground easily and quickly. However, you can bias your investment toward dividends with Vanguard International High Dividend Yield ETF (NASDAQ: VYMI), which basically takes all foreign stocks that pay dividends and buys the 50% of the list with the highest yields. If you are intrepid enough to buy individual foreign stocks, well-known dividend paying companies Nestle, Royal Bank of Canada, and Shell make the top 10 of the dividend-focused ETF. Vanguard International High Dividend Yield ETF's price performance has lagged that of Vanguard Total International Stock ETF, but when you look at total return, which assumes reinvested dividends, the high-yield ETF does better. Vanguard International High Dividend Yield ETF's yield is 4.1% compared to just 2.9% for Vanguard Total International Stock ETF. If you're focused on dividends, meanwhile, Schwab US Dividend Equity ETF (NYSEMKT: SCHD) is one of the best options available. The index this ETF tracks is fairly complex. It only considers companies that have increased their dividends for at least a decade. Then it creates a composite score that looks at cash flow to total debt, return on equity, dividend yield, and the company's five-year dividend growth rate. These are all things that you would probably consider if you were researching a dividend stock. The 100 highest composite-scoring companies, weighted by their market caps, make up the index. Some of Schwab US Dividend Equity ETF's top holdings are Texas Instruments, Chevron, and Merck. But here's the most important piece of advice from our CEO that I'd echo: Hold on to these investments for a period of three to five years. Stock investing is about patience, where you let winners run for a long time. That said, you'd need to ultimately do your own research, digging deeper into each of these ETFs and any of the stocks that you might find interesting. Notice that there is a bit of a theme on the stock front. Energy stocks, pharmaceuticals, and consumer staples makers showed up in several of the top 10 lists across the ETFs highlighted. If the specific stocks highlighted aren't to your liking, you might find value, foreign, and dividend stocks in these broader areas that you like enough to buy, even though the broader market looks expensive right now. The big takeaway here, however, is that you shouldn't throw in the towel just because the S&P 500 index looks pricey. The market is much bigger than the S&P 500, and there is usually some investment opportunity to find if you look hard enough, and you stay focused on the long term. Before you buy stock in Vanguard S&P 500 ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Vanguard S&P 500 ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,432!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,854!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Reuben Gregg Brewer has positions in Procter & Gamble and Texas Instruments. The Motley Fool has positions in and recommends Chevron, Merck, Texas Instruments, Vanguard Index Funds - Vanguard Value ETF, Vanguard S&P 500 ETF, and Vanguard Total International Stock ETF. The Motley Fool recommends Johnson & Johnson and Nestlé. The Motley Fool has a disclosure policy. Motley Fool CEO Tom Gardner: S&P 500 (VOO) at 25× Earnings Is Stretching Valuations was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
11-07-2025
- Business
- Globe and Mail
Motley Fool CEO Says The Fool's Edge Is a True 5-Year Time Horizon
Key Points The Motley Fool was largely founded on the idea that a long-term mindset produces superior returns. That investing philosophy has not changed in the 32 years since The Motley Fool was launched. A strict horizon of five years or more forces investors to clarify what's important and what isn't. These 10 stocks could mint the next wave of millionaires › There's comfort in knowing you've got options. That's true in terms of careers, relationships, and even investing. Being able to exit a stock position whenever you want makes it much easier to enter that position in the first place. As is the case with anything in life though, just because you have flexibility doesn't necessarily mean you should always use it. Sometimes the smartest decision you can make as an investor is doing nothing. That's because a more active approach to investing often ends up chipping away at your total returns. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » That's a key takeaway from a recent interview with Motley Fool co-founder and CEO Tom Gardner. When asked about the Fool's approach to picking stocks, he explained: "Our system is saying, we're looking five years out -- we're not the system that's trying to make the call in the next six months." That seemingly off-the-cuff comment is the stuff of market-beating investing wisdom. More activity can easily mean smaller gains Gardner's entire thought was this: "Everyone needs to realize that our system is saying, we're looking five years out. We're not the system that's trying to make the call in the next six months. That can happen in financial media, elsewhere. That can happen in trading systems and trading sites... you can go to those sites for that up-to-the-second stuff. It's not really us. We can't help you in that area. But we do think history shows that systems like ours are where the real money is made over the long term." He's right. Most of the money made in the stock market is made over the long run. Or more specifically, most of the net gains the market dishes out are dished out to investors who buy and hold stocks for at least five years. More frequent trading can easily lead to results that lag the market's average performance. It might even drag you into the red. Standard & Poor's regularly updates some interesting statistics that support this claim. In its most recent comparison of passive index funds vs. actively managed funds, the financial giant found that over the course of the past three years, only 15% of large-cap mutual funds available to retail investors in the U.S. actually beat the benchmark S&P 500. The rest lagged it. Things don't get any better when you look at longer time frames, either. Over the past 10 years, 84% of large-cap funds trailed the benchmark index, while nearly 90% of all actively managed domestic funds underperformed the S&P 500. And for the record, it's incredibly rare for one of the leading performers in any given year to remain a leader in subsequent years. Hedge funds don't fare any better, by the way. Although they're built and actively managed with the goal of maximum performance, numbers crunched by investment management outfit Aurum indicate that while the average hedge fund gained a respectable 11.3% last year, that trailed the overall market's gain of 14.5%, extending their long trend of underperformance. Take the hint: Less is more There's a lesson for average, ordinary individual investors buried in the numbers. It's incredibly difficult even for investing professionals to predict what the market or an individual stock is going to do over the course of any given few months. Indeed, stocks often do quite the opposite of what it seems like they should do over short-term periods. Yet, predicting how the market or a particular stock is likely to perform in the long run isn't nearly as difficult for informed, disciplined investors. This seems counterintuitive. After all, the further down the road one looks, the blurrier the picture is apt to be. Except that it is the short-term view that's obscured by all the noise that can foment both fear and greed, and in the longer term, that noise often ends up meaning very little. The true nature of an individual company or an entire national economy, on the other hand, will actually shine through given enough time -- say, five years or more. As the legendary value investor Benjamin Graham once brilliantly put it, "In the short run, the market is a voting machine but in the long run, it is a weighing machine." Your chief challenge as an investor is simply to distinguish between the short-term "voting" driven by meaningless noise and the long-term "weighing" that reflects the fundamentals. That's what The Motley Fool aims to do, by looking past the noise to focus on the five-year view. If you can do that, you'll enjoy a competitive edge that most investors don't. It's actually quite freeing once you learn to do this, in fact. In many ways, this mindset not only gives you permission to ignore headlines that won't really matter in the long run, it forces you to focus on the more important details of your prospective investments. It also allows you to spend less time managing your portfolio so you can devote more time to more important matters like your health, friends and family, and hobbies. In other words, working smarter rather than harder can leave investors with bigger profits than they'd be likely to achieve with a more activist approach. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,049%* — a market-crushing outperformance compared to 180% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of July 7, 2025
Yahoo
11-07-2025
- Business
- Yahoo
Motley Fool CEO Says The Fool's Edge Is a True 5-Year Time Horizon
The Motley Fool was largely founded on the idea that a long-term mindset produces superior returns. That investing philosophy has not changed in the 32 years since The Motley Fool was launched. A strict horizon of five years or more forces investors to clarify what's important and what isn't. These 10 stocks could mint the next wave of millionaires › There's comfort in knowing you've got options. That's true in terms of careers, relationships, and even investing. Being able to exit a stock position whenever you want makes it much easier to enter that position in the first place. As is the case with anything in life though, just because you have flexibility doesn't necessarily mean you should always use it. Sometimes the smartest decision you can make as an investor is doing nothing. That's because a more active approach to investing often ends up chipping away at your total returns. That's a key takeaway from a recent interview with Motley Fool co-founder and CEO Tom Gardner. When asked about the Fool's approach to picking stocks, he explained: "Our system is saying, we're looking five years out -- we're not the system that's trying to make the call in the next six months." That seemingly off-the-cuff comment is the stuff of market-beating investing wisdom. Gardner's entire thought was this: "Everyone needs to realize that our system is saying, we're looking five years out. We're not the system that's trying to make the call in the next six months. That can happen in financial media, elsewhere. That can happen in trading systems and trading sites... you can go to those sites for that up-to-the-second stuff. It's not really us. We can't help you in that area. But we do think history shows that systems like ours are where the real money is made over the long term." He's right. Most of the money made in the stock market is made over the long run. Or more specifically, most of the net gains the market dishes out are dished out to investors who buy and hold stocks for at least five years. More frequent trading can easily lead to results that lag the market's average performance. It might even drag you into the red. Standard & Poor's regularly updates some interesting statistics that support this claim. In its most recent comparison of passive index funds vs. actively managed funds, the financial giant found that over the course of the past three years, only 15% of large-cap mutual funds available to retail investors in the U.S. actually beat the benchmark S&P 500. The rest lagged it. Things don't get any better when you look at longer time frames, either. Over the past 10 years, 84% of large-cap funds trailed the benchmark index, while nearly 90% of all actively managed domestic funds underperformed the S&P 500. And for the record, it's incredibly rare for one of the leading performers in any given year to remain a leader in subsequent years. Hedge funds don't fare any better, by the way. Although they're built and actively managed with the goal of maximum performance, numbers crunched by investment management outfit Aurum indicate that while the average hedge fund gained a respectable 11.3% last year, that trailed the overall market's gain of 14.5%, extending their long trend of underperformance. There's a lesson for average, ordinary individual investors buried in the numbers. It's incredibly difficult even for investing professionals to predict what the market or an individual stock is going to do over the course of any given few months. Indeed, stocks often do quite the opposite of what it seems like they should do over short-term periods. Yet, predicting how the market or a particular stock is likely to perform in the long run isn't nearly as difficult for informed, disciplined investors. This seems counterintuitive. After all, the further down the road one looks, the blurrier the picture is apt to be. Except that it is the short-term view that's obscured by all the noise that can foment both fear and greed, and in the longer term, that noise often ends up meaning very little. The true nature of an individual company or an entire national economy, on the other hand, will actually shine through given enough time -- say, five years or more. As the legendary value investor Benjamin Graham once brilliantly put it, "In the short run, the market is a voting machine but in the long run, it is a weighing machine." Your chief challenge as an investor is simply to distinguish between the short-term "voting" driven by meaningless noise and the long-term "weighing" that reflects the fundamentals. That's what The Motley Fool aims to do, by looking past the noise to focus on the five-year view. If you can do that, you'll enjoy a competitive edge that most investors don't. It's actually quite freeing once you learn to do this, in fact. In many ways, this mindset not only gives you permission to ignore headlines that won't really matter in the long run, it forces you to focus on the more important details of your prospective investments. It also allows you to spend less time managing your portfolio so you can devote more time to more important matters like your health, friends and family, and hobbies. In other words, working smarter rather than harder can leave investors with bigger profits than they'd be likely to achieve with a more activist approach. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $425,583!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,324!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $674,432!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of July 7, 2025 James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Motley Fool CEO Says The Fool's Edge Is a True 5-Year Time Horizon was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-07-2025
- Business
- Yahoo
A Message to All Investors From Motley Fool CEO Tom Gardner
Motley Fool co-founder and CEO Tom Gardner gets candid on stock market fears, what new investors should avoid, stock market valuations, the future of AI, and the investing system that maximizes the odds of generating wealth over the long term. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $422,419!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,083!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $694,758!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of July 7, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Tom Gardner has positions in Bitcoin. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, Bitcoin, Costco Wholesale, Ethereum, Microsoft, Nvidia, Pfizer, and Starbucks. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. A Message to All Investors From Motley Fool CEO Tom Gardner was originally published by The Motley Fool
