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Taking the long-term investing approach

At The Motley Fool, we believe in long-term investing.

What does that mean? It’s as simple as the name sounds: we believe in finding investments and owning them over the long term.

Okay, of course, it’s simple, but not quite that simple.

Every direct share investment made is like buying part of an existing company. Buying shares of Diageo, for example, is like owning a piece of that company and every bottle of Johnnie Walker, Smirnoff and Baileys that it sells. If you happen to own shares of Unilever, you can have a small celebration with every Magnum bar that’s eaten and every time someone washes with Dove soap.

When it comes to investing, we believe the goal is to find great companies. Buy shares in these companies. And then think like owners of these companies by celebrating their successes. Then hold on to those shares for as long as possible.

For us, “holding on as long as possible” means that as long as we believe a company in which we’ve invested is still a great company, we’re likely to hang onto any shares we own in them! But if something changes at that company that makes us believe it’s not such a great company any more, then we may decide to sell them.

The main message here is that we believe in long-term investing.

What we don’t believe in is punting on shares, or any other high-risk products or activities. Share prices go up and down every day the market is open. They go up and down every hour the market is open. For shares of many companies, they may go up and down every second, and even when the market is closed!

We have not seen any evidence that most people can be successful and build wealth by betting on when a share or other instrument is going to rise or fall over the course of minutes, hours, or days. And we don’t encourage our readers to take this approach, because we want to help them learn to become financially successful over the long term.

This also means that we don’t encourage or promote any high-risk activities such as day trading, CFDs (contract for differences), spread betting, forex, or cryptocurrencies. They do not make investors long-term, part-owners in great businesses. They are ways to punt on shares, financial markets, and other much more obscure instruments. You don’t need to look further than the use of the word ‘betting’ in the name ‘spread betting’, or the wild and unpredictable swings in value of some of the products mentioned to get the idea.

We strongly encourage reading the ‘small print’ provided by brokers offering spread betting and CFDs, and any other highly risky products or activities such as those we’ve mentioned, where you’ll see disclosures stating that somewhere in the region of 75% (or more!) of retail traders using these products will lose money at risk.

We don’t want that to happen to any of our readers, or anyone for that matter!

Our aim at The Motley Fool is to help you learn about improving your finances and building wealth over time. We believe that investing can be an integral part of that goal.

However, we want to make it clear that we believe that long-term investing in great companies is one of the best ways to reach that goal, and that does not include high-risk activities, such as day-trading, spread betting, CFDs, forex or cryptocurrencies.