How To Invest

In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.

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Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.

If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)

If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.

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Dear Inner Circle member,

A friend recently asked me what I thought about his investing plan. He’s a middle-aged professional with a young family, and dependable cash flow from a growing practice. He began investing in the stock market prior to the 2008/2009 recession....
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Dear Inner Circle member,

We’ve often pointed out that hidden conflicts of interest are the single greatest risk you face as an investor. That’s because you’ll find conflicts of interest all over the place, but especially in the financial industry. The potential cost of any one conflict may be modest, but the potential cumulative damage is huge.

The Labor Department of former U.S....
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Dear Inner Circle member,

In assessing the market outlook for 2018, I see a lot of similarity between today and the situation I wrote about one year ago. That was when I told our Portfolio Management clients that I expected a big rise in the stock market in 2017, because it seemed to be repeating a situation I’d seen three times before....