As much fun as books are, I'm still a sucker for a great investing quote.
A great quote packs a certain punch. A great quote sticks in minds. And, most endearingly, a great quote is actionable.
One of the best quotes I've heard this year comes from The Motley Fool co-founder David Gardner via his weekly podcast 'Rule Breaker Investing'.
Gardner was discussing the advice he had given to past interns working at The Motley Fool U.S. and his one-liner came in response to a question on a common investing conundrum. When faced with the prospect of several great companies to invest in, how should we choose one? His suggestion:
"Make your portfolio reflect your best vision for our future"
I thought it was a brilliant line; navigating the decision-making challenge on a personal level and forcing us to think of where we see the world heading.
It doesn't mean you have to go out and buy a bunch of loss-making tech stocks. Well established companies like Telstra Corporation Ltd (ASX: TLS) or BHP Billiton Limited (ASX: BHP) might fit your view of the world better than a company like XERO FPO NZX (ASX: XRO), but that's the important thing about investing – it is so deeply personal.
Building a portfolio of companies inevitably becomes a reflection of ourselves; our perception of risk or value, and our beliefs about the future. It must be true, otherwise why not simply choose to invest in an index fund representing the entire S&P/ASX 200 (INDEXASX: XJO) and be done with it?
Your vision will be unique and can be the deciding factor when tossing up whether to invest in a particular company. For example you might believe that healthcare is going to be an increasingly important focus as populations age and sway towards high-margin healthcare companies.
Or you might think that food producers like Webster Limited (ASX: WBA) will be able to capitalise more on growing global demand.
Regardless, when it comes to choosing a company to buy, sell or hang on to, your decision should be driven at least in part by how you see the world changing in time.
For a single quote, that packs a lot of punch.
