Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue our series on back to the basics, and today we’re going to talk about buy and hold and why that’s important. As well as compound interest and some other interesting topics. So without any further ado, I’m going to turn it over to Andrew, and he’s going to start off our chat.

* The importance of buy and hold
* Compound interest and how it can make you wealthy
* Using a compound interest calculator
* The power of dollar cost averaging

Andrew:  If you’ve read any investing books and gotten involved with the whole scene, these are a lot of the things that are similar themes. I’m hoping with these episodes that we’re going at such an in-depth level that you’re still picking up things that are valuable.

The whole goal of this is to get things to stick. Because it’s one thing to hear something but if you can take these basics and master them– give yourself the reasons why and give yourself not just the how but the why. Give yourself a firm foundation and understanding on why these things are applicable and why, when things get tough, you’re going to have these values to stick to. It’s important to get this mastery rather than just floating through the wind, and when adversity comes, if you don’t have this foundation you might forget about all these lessons or you just might be stubborn and not listen to what’s been proven.
And this kind of like conventional logic when it comes to the stock market and investing and so I think it really can have a big impact on your final results as you navigate through the stock market.

I think that applies whether you’re an absolute beginner or even if you are more seasoned. Getting these lessons drilled and mastered in can go a long way. I would recommend going through them I think there’s a lot of good value here and obviously, today even if you’ve heard that you should buy and hold or you should diversify or you should dollar cost average.
The kind of things that you always hear I think it’s still important to get some more information and get some more. because you know these are the kind of things that I would want to teach to somebody who’s close to me if they’re getting first started in the market and try to get a broad sense of everything you need to learn and also really laser focus down into the big fundamental principles and why they’re they are.
I think it can be useful in that way too what I did and why I want to talk about buy and hold first is this is something you’ll hear a lot, and this is something that really will be your biggest advantage in the stock.
When you’re buying stocks is this idea of buy and hold, so what buy and hold means is buying a stock and holding it. It’s not trying to time the market; it’s not trying to buy a stock low and sell high and kind of being done with it. I mean buy low sell high is very important but at the end of the day, you’re going to win not because of the stocks that you pick and the individual companies. You’re going to win because you are in for the long term.
I’m sure you’ve heard over and over and over again about the metaphor with the tortoise and the hare and how it’s important to be patient and to look at everything in the long term, and that’s not for the wrong reasons. Just because it’s conventional wisdom when it comes to a lot of different areas in life, it’s because this is going to be a big advantage to investing in the stock market and especially in the stock market and especially in the environment that we are in today.
This environment that we’ve seen for years and decades past and it’s really valuable to understand these ...