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Ian Dunlap has become a trusted source for investment advice. As the founder of the Red Panda Stock Club, which offers premier advice and portfolio management for investors, he’s earned the respect and confidence of many traders.
And he has some suggestions for those trying to decipher exactly who to trust in a landscape where many claim to be experts.
“No. 1, ask them to make you money for free,” Dunlap said in a new episode of the Financial Freestyle podcast (see video above or listen below). “No. 2, go with your intuition. And then three, the thing that I've learned about all of us who are really good, all the people who invest, we all get along. … You may have differences in stocks, but there’s a mutual respect amongst each other. Usually, if a person doesn't have respect in that circle, there’s a reason why. But ask them to make you money first for free.”
Before going on to educate others about markets, Dunlap remembers the first moment he wished he had invested.
He recounted that a friend who worked at JPMorgan called him and said, “I want you to sell everything you have, and I want you to invest in these five companies.” Dunlap said he ignored his friend’s advice and chose not to invest his money. His friend, meanwhile, ended up making $3.8 million on his investments and was able to retire at 35.
“From that moment, I said I'll never miss another crash,” Dunlap said. “Often we think of a crash as … detrimental to most people, but if you know how to take advantage of them, that's when you can produce your greatest windfall in your life.”
Now, Dunlap said he looks at the market for “12 hours a day” and has bought “maybe 1,300 [or] 1,400 books on investing.” He has dedicated his time to studying how the stock market works by going to the exchange in Chicago to learn from traders and watching whatever programs he could on the internet.
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Though his friend claimed to make millions from investing in just a short period of time, Dunlap is a firm believer that by holding a small number of investments “for 20 to 30 [years],” you’ll be on your way to making significant money.
“Because the market has gotten so hot and so ripe, I think too many retail traders focus on sector rotation when you need to really just pile into four or five really great companies for the rest of your life,” he said. “I don't think you need 20 stocks in the portfolio to do incredibly well. And if so, you can just get an index.”
