1 Important Lesson I Learned After 20 Years of Investing

Investing when stocks seem to go lower and lower isn’t always fun, and it’s not possible to buy at the exact perfect time with any degree of accuracy. But that doesn’t mean you should keep your cash on the sidelines until things calm down. In this Motley Fool Live video clip, recorded on Jan. 27, Fool.com contributor Travis Hoium shares one of the most important lessons all long-term investors should keep in mind, especially when the market gets turbulent.

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Travis Hoium: What I’ve learned over the last, particularly 20 years of paying attention to the markets on a more day-to-day basis is that it doesn’t matter when you buy a great company, you’re going to forget about what that entry price was or whether it was the top of the market or the bottom of the market.

If you bought Apple before the crash in 2008, you probably wouldn’t be too worried about it if you bought it at the bottom. You might not even remember that. If you are buying and holding great companies long term, all these entry-point things that we’re talking about are rounding errors. It’s painful to take that 50%, 80%, 90% drop.

But if you really believe in the company long term and they are executing, and that’s why we keep talking about these things, is the company profitable? Is it growing? Is it executing on what they say they’re going to do? Is there a moat being built? That’s really what’s going to drive long-term value. If you got the next Tesla or Netflix or Amazon, and you’re worried about buying a little bit too high, it doesn’t matter. I literally wrote an article, I got to find it, right after Tesla went public, saying this is why I’m buying Tesla stock.

Then we have these trading rules where we can’t buy stocks for a couple of days. Over that couple of days, the stock went up 30% or 40%. So, I didn’t buy it because I thought it’ll just come back to me. It never did. We’re in this for the long haul.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matthew Frankel, CFP® has no position in any of the stocks mentioned. Travis Hoium owns Apple and has the following options: long March 2023 $250 puts on Tesla. The Motley Fool owns and recommends Amazon, Apple, Netflix, and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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