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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Motley Fool: Wise investing takes more than just time

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It’s hard to find a better way to build wealth over the long run than by investing in the stock of healthy, growing companies. But some of us just aren’t ready to invest.

“Active” investing, where you select your own stocks, doesn’t require a Ph.D., but it does require some skill, discipline and time.

Signs you may be ready:

• You understand that the value of your holdings will fluctuate, and that sometimes you’ll lose money.

• You are willing to do some math now and then.

• You won’t need any of the money you invest for at least five years.

• You can tell the difference between a balance sheet and an income statement and know where to find them.

• You know that understanding a business is much more important than following stock prices each day.

• You have a long-term investment horizon and can hang on to a stock for years.

• You know to compare your performance to a benchmark such as the S&P 500 index.

And you’re probably ready to invest in a company when:

• You can name its major products, services and competitors.

• You can list reasons why you’re buying it and what would make you sell it.

• You have a good handle on its competitive advantages.

• You have studied its financial statements and crunched some numbers.

• You have multiple sources of information about it.

• You will read its four earnings reports each year.

Don’t let this list discourage you. Becoming a successful investor is achievable and can even be fun. It’s never too late to start learning. Click over to www.fool.com and www.betterinvesting.org for more guidance.