Investing for the Long Term: Lessons from MoneyWorks4me Core Superstars

Hello, fellow investors! Welcome to another edition of the MoneyWorks4me blog, where we share our insights and tips on how to make your money work for you. Today, we are going to talk about one of our most popular and successful services that helps you build a wealth-creating portfolio: the MoneyWorks4me Core Superstars.

The MoneyWorks4me Core Superstars plans cover the best, strongest most resilient company stocks from which you can build a Core portfolio of 15-18, investing in them at reasonable prices. Core means main, central, essential, fundamental, principal, and that is what this portfolio should be for you. This portfolio built using a Quality-at-Reasonable-Price way of investing ensures you create wealth from your stock investing.

From years of investing and helping our subscribers embrace this way of investing, here are the key insights we have from Core Superstars.

1. Invest in businesses, not stocks

We focus on the quality and performance of the underlying business, rather than the short-term movements of the stock price. We look for businesses that have a durable competitive advantage, a loyal customer base, a strong brand, a high return on capital, a healthy cash flow, and a capable management team. These are the attributes that enable a business to grow and create value for its shareholders over time. You can see the Moneyworks4me 10-year X-ray to reassure yourself why the stocks we have chosen in this plan are the best. Not surprising that Core Superstars is a rather short list, but enough to provide a strong foundation for your stock portfolio.

2. Buy when they are available at reasonable prices

It is most unlikely that these stocks will be available cheap but it happens quite regularly that they are attractively priced. This happens when others are fearful. We take advantage of market corrections and crashes to buy high-quality stocks at attractive prices. We use our valuation framework to determine the fair value and margin of safety for each Core stock. We buy when the stock price is at or below its fair value and more if the discount is significant. We have seen that Core stocks rebound the fastest from general market corrections; perhaps the best time to buy them.

3. Trust in ‘Class’ not current ‘Form’

In investing this advice is very useful. All companies face challenges and it’s very unlikely that even the best will never falter. Now, when such stock-specific issues occur the market tends to panic and lose confidence, and generally sell, lowering the prices to attractive levels. When we hear ‘the quarterly performance did not meet market expectations’ for Core stocks, we check if the market has presented us with an opportunity. It is common to see that market players and analysts have high expectations from a company in a quarterly result which is not met, maybe by a margin. A correction that takes the price below our MRP is an opportunity we don’t want to miss. Having ultra-stringent criteria to qualify as a Core stock helps us recommend investing in such opportunities. We may underestimate the time required for the company to fully recover and get back on track but as an investing strategy, this has worked very well especially since we are in the game for the long term.

4. Hold for the long term

We resist the temptation to sell prematurely or chase short-term gains. We believe that time is our friend, not our enemy. We hold our Core stocks for at least 5-10 years, or until there is a fundamental change in the business or valuation. We ignore the noise and volatility of the market and focus on the long-term prospects of the business. We even recommend reinvesting our dividends and let compounding work its magic.

As you would have realized, it is the combination of acting on these 4 insights that enables our subscribers to invest substantially in their Core Portfolio, stay invested for a long, and not worry about market volatility but treat it as a friend, an opportunity and enjoy outstanding returns even though we always advise them not to start with high expectations. We call the plan Core Superstars since they have outperformed the market by a wide margin over the past 10 years, generating an annualized return of 18%, compared to 11.2% for the Nifty 50 index.

These are some of the lessons we have learned from investing in the MoneyWorks4me Core Superstars portfolio. We hope you find them useful and apply them to your own investing journey. If you want to know more about our portfolio and how you can join us, please visit our website or contact us today. Thank you for reading and happy investing!

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