At kimsnider.blogs.com, Kim Snider drew investing lessons out of the life and work of 41-year-old Olympian swimming star Dara Torres, who left Beijing with three silver medals. Snider noted that "Dara Torres is a success story because of her discipline. And the same commitment to discipline can do for investors what it does for elite athletes." She explained that in both athletic training and investing, it's critical to have a plan and to stick to your system, not to get derailed by a market slump or injury.
As I thought about it, more lessons came to mind.
A balanced life
For example, Torres has a preschool daughter. Many times, we can get so focused on one goal that we ignore other important parts of our lives. We may put everything we have into our job, and neglect our families to some degree. We may spend so much time working in our garden that we never get around to inviting friends over for a backyard barbecue. Torres seems to be doing a good job leading a balanced life -- with her sport and her family. We can do the same with our investing.
If you don't really have the time or interest to study stocks, and follow their progress, and make lots of buy-and-sell decisions, there's nothing wrong with opting to invest in some solid mutual funds. In fact, you may end up with better returns that way! It's true that many managed funds underperform simple index funds, but there are still plenty that outperform. Consider the Janus Contrarian (JSVAX) fund, for example. Over the past five years, it has averaged an annual market-whomping return of more than 15%. Its top holdings recently included Chesapeake??Energy?? (NYSE: CHK), SandRidge??Energy (NYSE: SD), and DirecTV (NYSE: DTV).
A marathon
Finally, Torres is still training, feeling that she has "unfinished business" after missing a gold medal by one one-hundredth of a second. In investing, too, we should be patient and diligent, and aim high. Look at how well some companies' stocks have performed over the long haul -- all of the following have beaten the market handily:
|
Company |
10-Year Average Annual Return |
|---|---|
|
Toronto-Dominion Bank (NYSE: TD) |
19.2% |
|
International Game Technology (NYSE: IGT) |
15.2% |
|
United Technologies (NYSE: UTX) |
13.2% |
|
McDonald's (NYSE: MCD) |
8.2% |
Source: Yahoo! Finance.
To find some top-notch funds, try (for free) our Motley Fool Champion Funds newsletter service, where I've found a bunch of winners myself.