Skip to main content

Effective growth investing lessons from master investors

How do you achieve sustainable growth in investing? One needs to choose those leading companies that are prepared to provide strong, consistent and long-term increases in profits and revenue. These are the firms that reward their shareholders with above-average market returns.

Apply these tips coming from some of the most experienced investing leaders. See how you, too, can discover the latest winning growth stocks and, thereby, make a fortune for yourself.

1. Go for Quality

The best investment choices are often the best businesses you can find. David Gardner, popular investor and co-founder of Motley Fool says, "I look for the excellent, buy the excellent and add to the excellent in time. However, what I sell is the mediocre. That is my investment style." 

Quality companies possess the most powerful competitive edge, the widest market potentials and a top-of-the-line management. They know how to be creative, trend-setting and pioneering. Most of all, they can build wealth for their shareholders and lead others to achieve their dreams.

2 & 3. Jump in as early as you can; and grab that basement-price offer

You can maximize your profit by investing early in a great business as more investors join in the harvest. Wealth abounds for those who practice this principle – especially for the 10- and also the 100-baggers – bringing on life-changing gains.

Nevertheless, many investors frequently hesitate to enter into the early-stage surge of best growth company stocks because they appear pricey, only to regret having missed the opportunity to gain in the end. While buying stocks in these quality businesses at high prices is an option, we can decide to go ahead and pay the premium for a quality acquisition. Setting your targets too low or just a notch or two below the optimum level might cause you to lose the opportunity to hit a multi-bagger.

4. Invest on a long-term duration

Warren Buffett puts it this way: "My favorite holding period is forever." CEO and master investor, Tom Gardner, in fact, has established at Motley Fool at least a five-year holding time rule in an Everlasting Portfolio since he adheres to the effectiveness of holding stock on a long-term basis. In David Gardner’s words, as a prime mover of one of the most efficient high-growth investment-consultancy services in the world, the heart of this investment approach consists of “two keys. . ., stock by stock: In before the big majority of people, and out after the big majority of people”.

Aiming to buy stocks in businesses and holding on to them for years or even decades allows the power of tax-deferred compounded returns to our advantage.

5. Those who win keep on winning

Tom and David Gardner reveal another winning advice: Invest in businesses and management groups with unequalled track record of success. In their tweeted message, they say:

“Our take on that famous disclaimer: ‘Past performance’ may turn out to be the single *best* determinant of future results we have can.”

Although it is not guaranteed, winning can be made into a habit. The force of momentum and the trusted experience developed in past successes tend to favor those who continue to face investment risks. And we do not refer to foolhardy risk-taking based on pride, but well-informed, facts-based choices born out of positive and strategic projections of a fruitful future.

6. Let your portfolio speak your best to the world

David Gardner once gave this valuable advice: "Determine where the world is headed; and as soon as you can, get there." Your portfolio speaks of your aspirations, interests, specialization and profession – that is where your advantage lies. Above all, your portfolio runs parallel to the trajectory of your vision of the future—and with a more positive view, the clearer the vision is.

7. Do not give up the fight

Growth investing can be frustrating at times; there will be moments when you harbor doubts and want to give up. Certain inexplicable short-term fluctuations and extreme bear market dips may wreak havoc on top-quality yet usually high-priced growth stocks, taking a toll on your emotions. Ultimately, the only path to success is to remain steadfast throughout any undesirable turn of event.

“The short-term will not teach an investor to learn enough – usually in a significant way -- to be so successful in the long-term,” according to Tom Gardner.

Be assured with the knowledge that everything will pass and, thus, you must expect the big-league companies to come out victorious after the dust clears up, remaining stable while the rest of the bunch lose their market share. With that in mind, consider such sell-offs as potential moments for strengthening your positions at even higher prices and enhancing your long-term returns.

Popular posts from this blog

Savings: Where to earn the best interest on your money right now

If one of your New Year's resolutions is to grow your savings, one smart strategy is to keep your money in an account earning the most interest.
The Federal Reserve has been slow to raise interest rates, and even recent hikes haven't trickled down to consumers in the form of better savings yields. The average savings account offers a paltry 0.19% annual return, only slightly better than a year ago, according to Deposit Accounts.
Some experts say that money could grow faster at online banks. Some CDs, or certificates of deposit, are also more generous than others.
"If you're not seeking out the best returns on savings accounts and CDs, you're leaving money on the table," said Greg McBride, chief financial analyst at Bankrate.com. "It's the only place in the investment universe where you can get extra returns without extra risks."
These accounts are protected by the Federal Deposit Insurance Corporation, a government agency that provides deposit i…

Make Your Investing Resolutions Reality in 2018

These six New Year's resolutions will give your investment portfolio a boost in 2018, deliver long-lasting rewards and require neither spandex nor excessive amounts of kale.
It’ll be nearly impossible to find an open treadmill at your local gym come January. By March? Everything’s back to normal again.
Welcome to the season of good intentions. Many people will start 2018 with a New Year’s resolution like exercising more or losing weight, only to abandon it within weeks.
Sound familiar? Even if you haven’t succeeded in the past, 2018 can be different. (No, really!) If you’re unsure where to begin and would like to start with some quick wins, how about your investment portfolio?
Investing resolutions can reap long-lasting rewards and require neither spandex nor excessive amounts of kale. Pick and choose from the following investing resolutions, or go ahead and tackle the entire list.
Save more (and invest it)
Spending less and saving more is a noble resolution, but here’s some bad ne…

9 money mistakes to avoid in your 40s

Your 20s were all about setting up your financial foundation and establishing good habits. Your 30s were about life changes like getting married, having kids, and building your career.
In your 40s, everything is amplified even more. You've got growing kids and aging parents — and what you don't have is a ton of spare time.
There's a lot you can do in your 40s to protect your money and care for your family before you begin thinking about retirement in your 50s or 60s. Here's what you should avoid:
1. Buying more house than you can afford
With your growing family, that starter home in a bad school district isn't meeting your family's needs anymore. Suddenly, you want more space for your kids to run around, and you want them to grow up in a neighborhood with lots of friends their age.
It's tempting to opt for more square footage, a larger yard, and an upscale neighborhood. But this means a bigger home loan, increased maintenance costs, and high property taxes.