Motley Fool co-founder David Gardner joins Paula to share his philosophy of “Rule Breaker” investing. Instead of obsessing over short-term market moves, Gardner explains how to identify high growth stocks that are shaping the future, why “overvalued” companies often end up being the biggest winners, and how long-term optimism is the most powerful financial strategy you can adopt.

What You’ll Learn in This Episode:

• Why September has a bad rep for stocks (and why it doesn’t really matter).

• The 6 traits of a Rule Breaker stock — and how to spot them.

• Why “overvalued” often means “undervalued by the market’s metrics.”

• How to decide when (if ever) to sell your biggest winners.

• What your personal “sleep number” has to do with portfolio allocation.

• Lessons from the dot-com boom and bust — and how they apply to today’s AI hype cycle.

• Why optimism isn’t just a mindset — it’s an investing strategy.

This episode blends timeless investing wisdom with practical guardrails you can apply to your own portfolio. Whether you’re an index investor or looking to buy your first individual stock, David’s contrarian perspective will give you a fresh, long-term lens on wealth building — and a clearer path to identifying the high growth stocks that can transform your portfolio.

Craving for more investment topics? Click here. 

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We cover five pillars: Financial psychology, Increasing your income, Investing, Real estate, and Entrepreneurship. It’s double-ii FIIRE.

Today, we’re diving into Pillar Three: Investing.

Pillar III | Investing

This letter “I” could very well be called the letter T right now — tariffs, trade war, and turbulence.

Tariff increases went into effect earlier this month, and the markets treated it like old news. Stock indexes were mixed.

And that’s to be expected. We’ve known since April that this on the horizon, and these policy changes have already been priced into the market.

What we don’t know are the long-term effects, but those impacts are incremental — and that story will play out over the coming months and years, rather than days or weeks.

We also know that there’s plenty of good news in the economy. The GDP is up 3 percent (partially due to reduced imports) and consumer spending is strong (even though sentiment is weak … but actions speak louder than survey responses).

The markets have priced in two Fed rate cuts over the remainder of the year, with the first cut likely when the Fed meets on September 16-17.

Home sales are at a 30-year low (great for buyers), but the expected rate cuts may help boost that volume.

And so, I’d like to suggest three other words represented by the letter T, which serve as a reminder for how to handle your portfolio.

#1: Timing the Market (Don’t)

Remember early April? The markets plummeted, and many people panicked.

There was a period of about a week or two when I was flooded with DMs, emails, and voice messages from people who were incredibly worried about their dwindling portfolio balances.

Nobody talks about that anymore.

Why? Because the markets have recovered 28 percent from their low in April. That stress is now a distant memory.

If you panic sold, you missed the recovery.

The thing about panic selling is that most people don’t announce, “Ahem. Ladies and gentlemen. Attention. Attention. I am about to panic sell. Thank you.”

That’s not what you tell yourself.

Instead, panic selling usually happens through post-hoc rationalizations.

People will say:

• “I’m getting more conservative as I get older” (even though you’re 35 and nothing about your timeline changed)
• “I want to take some profits while they’re still there” (translation: I’m scared they’ll disappear)
• “The fundamentals have changed” (code for ‘this time it’s different’)
• “I’m just rebalancing” (my friend, you rebalanced two months ago)
• “I’m moving to a more diversified strategy” (translation: I’m fleeing to cash or bonds because I’m worried)
• “I need the money sooner than I thought” (no you don’t)

The pattern is the same. It’s rational language used to justify emotional decision-making.

These rationalizations are how we give ourselves permission to panic, without admitting — to the world, or to ourselves — that’s what we’re doing.

It sounds good on the surface, but it’s masking deep-seated anxiety.

If you panic sold in early April, there’s no shame in it. Those missed gains are the cost of self-knowledge. You’ve battle-tested your risk tolerance. You’ve gained knowledge about your investment strategy. You know how to actually asset allocate accordingly.

If you held steady or — better yet — bought the dip in early April, first, congratulations. Second, your real gain is also self-knowledge. You’ve tested your spot on the risk-reward spectrum.

Here’s the reality: We might be headed for a recession. That was true in early April, and it continues to be true in early August.

But even if we do go into a recession, we don’t know its severity or its duration. And recessions are not necessarily synonymous with steep or protracted market declines.

So even if we do go into a recession, there’s no need to sell. In fact, it’s often a fantastic time to buy if you have a disciplined investment strategy in place.

#2: Timeline

The second T is about the only type of “timing” you should participate in: investing based on the timeline of your life and goals.

You’re not timing the market. You’re timing your life.

Let’s go back to the excuse that many people use when they panic: “I need the money sooner than I thought.”

This happens a lot when the markets get choppy. People suddenly decide that their 15-year time horizon has shrunk down to five. But has it really? Do you have a written plan?

Here’s the thing: if you don’t need the money for a decade or more, today’s market movement is just noise. Static. Background chatter.

Your real timeline hasn’t changed just because your stress level has.

Try this: associate a specific goal with every investment.

Is that money for a short-term goal (less than 5 years), like buying a car, travel, or a home renovation?

Is it for a medium-term goal (5-10 years) with a highly flexible date, like buying a vacation home? Or does your medium-term goal have a fixed date, like college?

Or are you not tapping that money until 2035-2040+ ?

Some accounts have clear, obvious associated goals: 401k, IRA, 529.

But there’s a decent chance you might have accounts that don’t have specific goals.

Maybe you don’t know when/how you want to tap your taxable brokerage account.

Maybe you’re in the early stages of planning a potential early retirement using the SEPP 72(t), or living a Coast FI or Barista FI lifestyle.

Maybe Roth conversion ladders (and other sophisticated techniques) have entered the chat.

Suddenly the timeline is malleable. And that makes everything feel fuzzy.

You could Coast FI into a work optional lifestyle in … 4 to 5 years. Or maybe 7 to 8 years. Or maybe 10 to 12 years.

“It depends!,” you say when asked. It depends on how lean FI / chubby FI / fat FI you want to live, and on how well the markets perform, and whether or not your equity stake in your company fully vests …

… that’s why the timeline and goals are so amorphous …

… but you don’t know how to manage investments in the context of a timeline that’s so fuzzy.

And that’s when you’re prone to panicking at the first sign of market turbulence.

You need an anchor.

Get clarity on the timeline, and the question of “What should I do with my investments?” will often answer itself.

Because once you’re clear on the timeline, then the rest is a simple matter of asset allocation and aligning with your long-term investment strategy.

#3: Trust (the Process)

The third T is about trusting the process you set up when you were thinking clearly.

You didn’t randomly pick your asset allocation. You didn’t throw darts at a board to choose your investment mix.

You thought about it. You researched. You considered your goals, your timeline, your risk tolerance.

You set up automatic contributions. You chose low-cost index funds. You decided on a rebalancing schedule.

That person — the calm, rational you who made those decisions– was operating with a clear head. No market stress. No daily news cycle anxiety. Just good, solid financial planning.

But when markets get volatile, we suddenly think that stressed-out version of ourselves is smarter than the person who thoughtfully designed the plan.

Spoiler alert: we’re not.

The YOU who planned this strategy was thinking about decades. The you who wants to change it is thinking about today’s headlines.

Trust the process you built. Trust the person who built it. That person was you, thinking clearly.

The whole point of having a long-term investment strategy is so you don’t have to make investment decisions when you’re emotional.

You already made them.

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Exchange-traded funds (ETFs) make investing simple. With a few clicks of a button, you could quickly gain the opportunity to profit alongside a diversified collection of high-quality businesses.

In addition, select ETFs offer relatively easy ways to cash in on powerful economic trends, such as the artificial intelligence (AI) boom. Well-chosen funds could also provide you with bountiful and reliable passive income.

Read on to see why AI chip suppliers and high-yield dividend payers are particularly attractive stocks to buy today.

This ETF could help you profit from the AI revolution

The world runs on semiconductors. Laptops, smartphones, medical devices, modern cars and trucks, airplanes, satellites, and solar panels are just some of the products that require these essential components to function properly.

The microchips that underpin computer technology of all sorts are becoming even more valuable in the age of AI. The global semiconductor industry is poised to grow from $697 billion in 2025 to $1 trillion by 2030 and $2 trillion by 2040, according to Deloitte. Chip suppliers are set to see their sales and profits soar in the coming years.

The iShares Semiconductor ETF (SOXX -2.95%) offers you a convenient way to claim your share of this enormous and rapidly expanding market.

The fund is managed by BlackRock, one of the world’s largest investment companies, with assets under management of $12.5 trillion as of the end of the second quarter.

The ETF holds stakes in 30 stocks, all of which are key cogs in the global semiconductor supply chain. Leading chipmakers Nvidia, Advanced Micro Devices, Intel, Broadcom, and Taiwan Semiconductor Manufacturing stand among the fund’s largest holdings.

The ETF’s annual expense ratio is reasonable at 0.34%. That amounts to $3.40 for every $1,000 invested.

All told, the iShares Semiconductor ETF is a relatively effortless and low-cost way to position yourself to benefit from the AI-fueled chip boom.

This dividend ETF can help you build a lucrative passive income stream

Dividends are the sweet rewards of investing. A swell of cash payments pouring into your account year after year can drastically reduce your financial worries. Dividends can also help you pay for the things you enjoy.

Moreover, dividend stocks can add ballast to your diversified investment portfolio. Stocks that regularly pay out cash to their investors are generally less volatile than those that don’t. Dividend-payers also tend to outperform non-dividend-payers during bear markets. Better still, companies that can consistently grow their cash distributions often see their share prices rise in kind.

As its name suggests, the Vanguard High Dividend Yield ETF (VYM -0.09%) offers convenient access to a broad collection of income-generating stocks with above-average payouts. The fund’s annualized dividend yield of roughly 2.6% is more than twice that of the S&P 500 Index, making it an excellent source of passive income.

With positions in roughly 580 stocks across a range of sectors, the ETF also provides investors with the wealth-protecting benefits of diversification. Top holdings, which include dividend stalwarts such as JPMorgan Chase, ExxonMobil, and Walmart, further help to mitigate the risks for shareholders.

Best of all, Vanguard charges ultralow fees, so nearly all the ETF’s gains will be passed on to investors. The Vanguard High Dividend Yield ETF has an expense ratio of 0.06%, which amounts to just $0.60 per $1,000 invested annually.

JPMorgan Chase is an advertising partner of Motley Fool Money. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, JPMorgan Chase, Nvidia, Taiwan Semiconductor Manufacturing, Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF, Walmart, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel and short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.

Investing in dividend stocks is a great way to steadily build your wealth. These companies can provide you with a solid base return that tends to grow over time as they increase their earnings and dividend payments. That combination of dividend income and earnings growth has historically added up to a much higher total return over the long term compared to non-dividend payers.

ConocoPhillips (COP -1.12%) and VICI Properties (VICI -0.15%) are two rock-solid dividend stocks worth adding more of right now or adding to your portfolio if you don’t already hold them. Here’s what makes them stand out.

The fuel to deliver high-octane dividend growth through the end of the decade

ConocoPhillips is on the cusp of a major growth wave. The oil and gas producer has invested heavily to transform its business into a cash-flow growth machine. It currently has decades of inventory with a supply cost below $40 a barrel. As a result, it’s producing lots of free cash flow at the current oil price point in the upper $60s. Meanwhile, its long-cycle investments in liquified natural gas (LNG) and Alaska should fuel robust free-cash-flow growth over the coming years.

The company’s 2024 merger with Marathon Oil has paid off even more than anticipated. The oil giant initially expected to capture $500 million in annual cost savings within the first year of closing the deal, which it subsequently doubled to $1 billion. It now expects to deliver $1 billion in additional cost and margin enhancements from this merger by the end of next year. On top of that, its investments in a trio of global LNG projects and Willow development in Alaska should add another $6 billion in incremental free cash flow to its annual total by 2029.

This surge in free cash flow will give ConocoPhillips more fuel to increase its already attractive dividend (at over 3%, it’s more than double the S&P 500‘s 1.2% yield). The company intends to deliver dividend growth within the top 25% of companies in the S&P 500 in the future. That high-octane growth rate from a company that already offers a high-yielding payout makes it a very attractive dividend stock to add to these days.

The high-end dividend growth should continue

VICI Properties has built one of the country’s largest experiential real estate portfolios. The real estate investment trust (REIT) invests in market-leading gaming, hospitality, wellness, entertainment, and leisure destinations. It leases the properties it owns to high-quality operating companies under long-term, triple-net leases (NNN), an increasing percentage of which escalates rents at rates tied to inflation (42% this year, rising to 90% by 2035). As a result, VICI Properties generates very stable and steadily rising rental income.

The REIT also invests in real estate-backed loans. These investments provide it with incremental interest income to support its dividend and often come with the option to acquire the underlying real estate in the future.

VICI Properties often partners with leading experiential companies. It provides them with capital to expand (through sale-leaseback transactions, real estate loans, and other financing), which supplies the REIT with new investment opportunities.

This strategy has paid big dividends for investors over the years. VICI Properties has increased its dividend payment every year since its formation seven years ago. It has grown its payout at a 7.4% compound annual rate, significantly faster than the 2.3% compound annual dividend growth rate of other REITs focused on investing in NNN real estate. With its dividend yield currently over 5% these days, VICI Properties is an attractive income investment. Meanwhile, with more portfolio growth ahead as its partners continue expanding, this REIT should provide investors with a lucrative and steadily rising stream of passive dividend income backed by its high-quality real estate portfolio.

Top-notch dividend stocks

ConocoPhillips and VICI Properties are great dividend stocks to add to these days. They currently offer higher-yielding dividends that should continue growing at above-average rates in the coming years. That positions these dividend stocks to produce attractive total returns from here.

Matt DiLallo has positions in ConocoPhillips and Vici Properties. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.

I recently got a cool perk from my employer: $1,000 to invest however I want. The idea behind it is to help everyone at our company get familiar with investing, try out our internal tools, and learn about growing wealth with stocks.

I’ve dabbled in stock picking before — and let’s just say my win/loss ratio isn’t exactly Hall of Fame material.

So with this $1,000, I’m not rolling the dice or doing anything risky. I’m going back to the same boring-but-beautiful approach that’s worked for me all along… Index funds.

My “index and chill” strategy

I could spend hours analyzing charts, earnings reports, and news headlines. But I’ve tried that before and never found it either fun nor profitable.

So rather than chase individual stocks, I’m investing my money into a total stock market index fund — something like VTI (from Vanguard) or FZROX (from Fidelity). These index funds own thousands of companies across every sector, giving me instant diversification.

When the stock market goes up, my investment goes up too. When it drops, yeah, mine drops with it. But over time, the market’s gone up more than it’s gone down.

How my $1,000 could grow to $17,449

I’ve got a couple decades left on my investing horizon. So I’m trying to play the long game.

If this $1,000 investment grows at 10% annually (which is in line with the historical average return of the S&P 500) here’s what it could turn into:

Data source: Author’s calculations.

Of course, markets fluctuate and there are no guarantees. But historically, the U.S. market has bounced back from every downturn — and gone on to hit new highs each time.

So while I’m not saying this $1,000 is destined for exactly $17,449 (let’s not jinx it), I like my chances betting on the market as a whole.

This bonus was wired straight into my brokerage account. I keep most of my investments at Fidelity, because it has no account fees, no trade fees, and a massive menu of index funds I can choose from.

Read my full Fidelity review here if you’re curious why I chose it (and how it stacks up for beginners or long-haulers).

Other cool things about index funds

It’s not just this $1,000. I put nearly all my long-term money into index funds.

They’re simple, but also really flexible. Here’s why I love investing in index funds:

• They’re liquid — I can buy or sell anytime the market’s open, and in small or big amounts.
• Easy to hold in any account type — I own index funds in my Roth IRA, my traditional IRA, 401(k), my brokerage account… even my health savings account (HSA).
• Super low cost — With most brokerages, there are no trade commissions and no monthly account fees. Index funds also have low expense ratios.
• No ongoing management — I don’t need to check on anything or do any maintenance.

Another cool thing is I can automate investments. So putting in new money to invest each month can happen automatically on a set schedule. Easy!

Investing is a long game

So that’s what I’m doing with my $1,000 bonus — the most boring thing in the world. Putting it into a low-cost index fund and just… letting it slowly compound.

This strategy has already panned out well for me over the years, and I’ve got no reason to switch it up now.

If you’re thinking about doing something similar with your own money — whether it’s $100 or $1,000 — you don’t need to overthink it. You just need a setup that’s simple, low cost, and built for the long haul.

Check out all our favorite top-rated brokers here, and find the one that matches your investment goals.

Are you a Walmart (WMT -1.18%) person or a Costco (COST -1.18%) person?

When it comes to shoppers, the two groups tend to be mutually exclusive, with many Americans swearing by one and swearing off the other.

But for investors, the question is a bit different: They want to know which they should put money into.

And that question is more relevant today than it’s been in a while. Many economists expect President Trump’s tariffs to start pushing the price of groceries — from bananas and coffee to soda and beer — higher in the coming months. The Tax Foundation expects tariffs to impact nearly 75% of U.S. food imports.

If and when prices of groceries rise, both Walmart and Costco are expected to benefit, as many Americans will trade down to retailers that emphasize low prices. Plus, because they’re so large, both retailers have significant supply chain leverage that should allow them to push back on higher prices from suppliers — to an extent, at least.

Walmart is quite a bit larger than Costco, with a market cap of $778 billion, versus $441 billion for Costco. Walmart has more than 10,000 stores on four continents and is the world’s largest retailer by sales. Costco is the world’s third-largest retailer; it has a membership model, with roughly 900 locations and 79.6 million paid household members and 37.6 million paid executive memberships. While they sell all kinds of items, Walmart and Costco rank as grocery behemoths.

Costco stock is up roughly 6% this year as of Aug. 21 and 181% over the past five years, while Walmart stock has gained roughly 8% year-to-date and 123% over five years.

Strong inflation era results

Walmart and Costco often do well when inflation pushes prices higher and shoppers look for bargains.

From January 2022 to February 2023, when year-over-year headline inflation ranged from 6% to 9.1%, Walmart kept the increase in grocery prices to 3%, compared to average price increases of 7.5% or more at rivals like Amazon, Kroger, and Target, according to a Reuters analysis. Walmart’s size and buying power help it force suppliers to keep prices lower.

As a result, in its fiscal 2024, ended Jan. 31 of that year, Walmart grew total revenue in constant currency 6% to $648 billion and its adjusted earnings per share 5.7% higher to $6.65. In the 52 weeks following that earnings announcement, Walmart shares climbed 66%.

Costco, on the other hand, makes a large percentage of its profits from membership income — membership fees totaled about 65% of net income in the most recently reported quarter. That business model — along with a reputation for good deals — helps steady the company’s results during an inflation spike. In its fiscal 2023 (ended Sept. 3 of that year), Costco saw U.S. net sales grow 6.7% to almost $238 billion. Membership fees increased 8% that year, to $4.58 billion.

In the 52 weeks after that earnings release, Costco stock rose 63%.

And just recently, in its third quarter of 2025, the retailer reported a 10.4% increase in its membership fee income, to more than $1.2 billion. Last September Costco raised membership fees by $5, to $65 a year, yet it saw no meaningful decline in members after the increase.

Both businesses and their stocks benefit from rising overall prices because they’re able to either keep prices lower than the competition (Walmart), which drives sales, or rely on membership fees (Costco) that drive profits.

What does the future hold?

So which stock should you invest in today in anticipation of rising grocery prices in the months ahead?

Well, stock prices ultimately track earnings growth. And analysts expect Costco to increase earnings per share for the current quarter by 10% (results will be released on Sept. 25).

As for Walmart, the retail behemoth released its second-quarter results this week and they were slightly disappointing. Adjusted earnings per share of $0.68 were lower than the average analyst estimate of $0.73, and that sent the stock 5% lower on Thursday. Revenue, however, came in at $177.4 billion, almost $2 billion higher than estimates.

Thus, the picture is mixed. Rising grocery prices will impact all U.S. retailers, and both Costco and Walmart have a history of thriving when that happens. With the uncertainty of Trump’s tariff policies still high, however, Costco’s membership-driven model may put it in a more advantageous position going forward.

Matthew Benjamin does not hold any of the stocks mentioned in this article. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.