Let's start out with what you may be most confused about right now. If you're a newcomer, you might be wondering just what the heck all this "Fool" stuff is, and why you should spend any time here. You were looking for investment or personal finance information (right?), and now you're suddenly staring a court jester directly in the eye.
Who are these guys?
What is this?
To make a long story short, The Motley Fool name comes directly from the beginning of Act II, scene vii of Shakespeare's As You Like It. In the days when Shakespeare was writing about kings, Fools were the happy fellows who were paid to entertain the king and queen with self-effacing humor that instructed as it amused. Fools were, in fact, the only members of their societies who could tell the truth to the king or queen without having their heads rather unpleasantly removed from their shoulders.
In Fooldom, you the reader are the king, and it's our job to tell you the truth about investing and show you how you can manage your own money better than the pros on Wall Street.
The mission of The Motley Fool was, is, and will always be to educate, to amuse, and to enrich. We're here to help you help yourself with all aspects of personal finance and investing. We don't manage anyone's money but our own, and we're not investment advisors. Again, our interest is solely in educating, amusing, and enriching. (We do have an interest in winning awards for producing the best financial information in the whole dang world, but that's pretty much a pride thing; there sure isn't any prize money that comes with those awards.)
When you're plying your trade in the investment world, you normally wouldn't want to be caught dead being called a "Fool," right? We think quite the opposite, of course. We look around at the supposed Wisdom in the world today, the Conventional Wisdom, and wish to put an end to it, to reform it. In fact we're on a mission here -- a mission from Shakespeare.
So what is some of the conventional wisdom so contrary to the Foolish point of view? We'll preview just a few slivers of it now -- suffice it to say that the subsequent 12 steps contain a touch more, and the rest of this website (as well as our other products and services also available to you) goes into Foolishness in much greater detail.
Conventional wisdom #1: You should let "experts" who manage mutual funds manage your money for you.
Foolish response: Yikes! Did you know that some three-quarters of all managed mutual funds underperform the stock market's average return? In other words, most people are paying Wise "professionals" to make them less money -- and these professionals are paid very, very well in the process! Mutual fund managers will try to persuade you that they have some special insight or crystal ball. Unfortunately, their impressive-sounding jargon is hogwash when compared to the actual performance of the market averages. If you're ever going to be invested in mutual funds, you needn't look beyond an index fund, which tracks the market's returns at a very low cost. (For more information, check out our Mutual Fund Center.)
Conventional wisdom #2: Financial gurus do a good job of predicting the direction of the stock market.
Foolish response: Nope. No one has ever demonstrated the ability to predict the stock market's future consistently and accurately. We are amazed and amused by all the people who still try to do it, and all the journalists who daily (or hourly!) quote them on the matter. Remain focused on the business performance of the stocks you own, and don't sweat where anyone's telling you the market's going. We've had 10 recessions since World War II, and we've emerged from every single one of 'em!
Conventional wisdom #3: Trust the Wall Street brokerage firms. They're here to help you navigate the labyrinthine world of investing.
Foolish response: Well, they spend hundreds of millions a year on TV commercials insisting that they can help us, but... ummm... don't count on it. First off, it's not in Wall Street's best interests to teach you. As long as you're in the dark about investing, you'll have to give your money over to Wall Street to manage it for you. That way, Wall Street professionals can charge you (often via hidden fees) to manage your money. The entire industry is built on your not figuring out how to manage your money. And, happily, that's exactly what your fellow Fools are here to help you do.
Further, most brokers are well trained in the subtle art of salesmanship and are paid based on how often you trade, not how well you do. (Click here for some of the bloodcurdling details.) That business model has created a massive conflict of interest, because the best way to invest is to buy great companies and hope to never have to sell them. This makes brokers sad. Not your problem.
Don't get us wrong -- there are some noble financial pros out there (and we'll show you how to find them a bit later). But the Wise have prevailed in the money world for far too long. Now it's finally time that some Fools showed up and leveled the playing field. By "Fools," of course, we don't just mean ourselves -- we also mean the millions of Foolish readers who come in here every month looking to answer one another's Foolish questions on our discussion boards. (Give our acclaimed discussion board community a visit -- we offer a painless free trial, with no credit card info required, and you may find lots of invaluable info and perhaps even a few new friends there.)
So let us forthwith make a caveat: If you have found a financial advisor or a mutual fund manager who has managed to beat the market averages for extended periods of time (five-plus years), net of fees and taxes, stick with 'em. Believe it or not, we Fools are not in the business of demonizing people, and there are noble, competent pros out there. If you find one, do not be ashamed to stick with him or her. But keep watching, and asking. A good advisor should not mind questions.
But whether you work with an advisor or go it alone, ask yourself these questions: What would it be like to know that you made the very best decision with every dollar you spent or saved? Can you imagine looking forward to balancing your budget or checking up on the returns in your brokerage account?
Imagine no longer. What follows is a guide to help you make all the right decisions -- confidently -- about your money. Knowledge is power. Foolishness is knowledge.
All that we humbly ask is that you use whatever you may learn here for the benefit of good rather than evil, and that if you chance upon some other Fool's question that you can help out with, that you give a thought to doing so.
We believe that when you take control of your financial life, you're taking control of your destiny, and that you'll be rewarded for doing so. By the time you're done with our 13 Steps, you'll be well on your way to a lifetime of successful investing and extreme Foolishness.
But before we get into all that investing stuff, first a word about your credit card sponsor....
.... to be continued.
Source:
http://www.fool.com/school/13steps/13steps.htm?source=InvAg
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