…as well as reveal how my simple approach could help you achieve something incredible with your own money.

But first, a confession: I don’t pick my own stocks.

It’s not that I can’t choose a few companies to invest in – it’s just that I prefer a little boost.

For the past 7-plus years, that boost has come from The Motley Fool.

I know what you’re thinking: and yes, I do work for The Motley Fool. I’m happily employed here and hope to be for a long time.

But I’m not a stock-picker (not even close – I studied journalism). So I actually follow the Fool’s opinions, just like you.

This is a perfectly great way to invest

You’re busy. You have a full-time job, or are lucky enough to have retired. Frankly, you don’t want to spend all of your free time reading about investments.

Me neither!

But you don’t want to pay someone else large amounts to manage your portfolio, right?

So you use investment sites such as The Motley Fool to filter the news for you.

We tell you what’s happening with popular FTSE shares, and you can use that information however you like.

Let me be clear: this is a perfectly great way to invest if you feel you already have a good baseline understanding of what you’re doing.

For the rest of us, we’d like more help knowing exactly which shares to buy and when… and maybe some guidance about when to sell, too.

That’s precisely what services such as Motley Fool Share Advisor are designed to do. You can read more about all the member benefits here.

Why I own Unilever, GlaxoSmithKline and Johnson & Johnson

At the beginning of this e-mail, I admitted that I don’t pick my own stocks.

Here’s another confession: I buy incredibly simple shares.

“Buy what you know – and can understand” is powerful advice that I think is well worth remembering.

Here are a few things you can ask yourself about a company you’re considering investing in:

• Do you understand how it makes money?
• Do you understand what it needs to do to be successful from here?
• Can you see this business thriving in 3 or 5 years?

Pretty straightforward, I know. That’s why I own shares in Unilever, GlaxoSmithKline and Johnson & Johnson. (Plus, who doesn’t love a dividend?)

It’s also why I perked up when I read about a hardwood flooring company called Lumber Liquidators (NYSE: LL.US) in December 2011.

It had been written about – a lot – by The Motley Fool in the States and had been tapped as a formal recommendation in one of our US premium services.

And while Lumber Liquidators ticks all these boxes…

• It makes money by selling hardwood flooring to tradesmen and DIYers so they can upgrade their homes.
• It can make more money by growing its network and selling more wood.
• It operates mainly in the US, where I believe a slow-burning housing recovery is under way.

…I am confident I would not have found this stock – and had the courage to buy – if I didn’t have The Motley Fool on my side.

I bought it on The Motley Fool’s advice and I’ve enjoyed reading coverage about it ever since.

What’s more, I’ll most likely follow the Fool when they tell me – and other members following Lumber Liquidators – that it’s time to sell.

Less than two years after buying in, I’m up 538%

I think selling is one of the hardest things for investors to do well.

‘Timing’ the top is next to impossible, and while you’ll never go broke taking a profit, it sure is painful to watch a share you’ve sold continue to climb.

I’ve been there myself. It’s a great feeling when shares go up – and a less-than-great feeling when they lose value. Taking profits means you can’t lose (on those shares anyway).

But falling victim to your emotional side and trading in and out of shares is a sure-fire way to miss out on fortune-building investments… and rack up a ton of dealing costs instead.

Case in point: Today, less than two years after buying in, I’m up 538% on my Lumber Liquidators investment.

It’s by far my best-performing share and an elusive ‘6-bagger’ that I don’t take for granted.

However, I’d be even better off if I hadn’t sold some of my shares last year when they’d just about tripled.

There I was, sitting on a near-200% gain and convinced the shares had peaked and there was nowhere to go but down…

Wrong!

It was a novice mistake. I was looking only at the share price. Nothing had changed about the company. It still ticked all the boxes for me as a share I wanted to own, and it still had all the signs it would keep growing.

But I sold some of my shares, took a nice profit, and have done a lot of ‘what ifs’ ever since (as in, what if I hadn’t sold some? The answer is I’d be thousands of pounds better off!).

They hardly sell and have enjoyed greater returns

As for me, I haven’t sold anything since cashing in some of my Lumber Liquidators shares.

I’ve learnt that lesson the hard way.

Out of curiosity, this week I looked at the Motley Fool Share Advisor scorecard to see what our pros have been selling…

…and while they’ve formally recommended dozens of different shares to members, they’ve sold only two.

And get this – even with my Lumber Liquidators gain, the Share Advisor scorecard still shows an average return greater than mine!

That tells me our pros are onto something.

The post The True Story Of One Fool’s 500% Return appeared first on The Motley Fool UK.