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Why Investors Shouldn’t Lose Faith in Stocks: Motley Fool Co-Founders

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While the stock market has rallied steadily in recent weeks and months, investor confidence has waned in the wake of a handful of scandals, including MF Global's $1.6 billion loss of client funds, Knight Capital's computer glitch that almost brought down the firm and the Libor-gate rate fixing matter.

"Not seeing any punishment for anyone at MF Global is a little concerning for investors," says Tom Gardner, co-founder of The Motley Fool with his brother David Gardner. David adds, "It seems like every week there is another Ponzi scheme being discovered."

[Related: Jon Corzine: Taken to Task for Excessive Chutzpah]

In addition to the general distrust of the system, David also notes that a lack of investing education has led to diminished confidence in the markets. The Gardner siblings say they are on a mission to help restore investor confidence. They have marked Sept. 25 as World Wide Invest Better Day and have launched a campaign to "educate, inspire and motivate" individual investors to return to investing basics that they believe will lead to financial security. The campaign includes a combination of online articles, videos and podcasts.

"It is a great time to invest and I have always felt that way," David says. "We are long-term investors. Assuming you have some capital you have to put it somewhere."

Tom says that "one way to invest with confidence" is to hold a stock for 5 to 10 years. Investors have to stop obsessing about quarterly earnings, he says, because you cannot adequately evaluate a company on such a short time horizon. Instead, look at the structure of a business: who runs it, who is on the board and employee turnover rate.

As for sectors, Tom likes consumer staples. These types of businesses are going to keep serving their customers and generating profits regardless of the regulatory climate, he says.

While there is a lot of skepticism out there, that also suggests there is a lot of money sitting on the sidelines. "When it comes back in, I feel really good about where my money is positioned," says David.

To learn more about World Wide Invest Better Day, click here.

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