35 | Patient Investing, Part 7 of 7: The Secret Ingredient
Investing in a manner that you believe in and in which you have a baseline understanding knowing that, regardless of strategy or plan, the only guarantees are that someone will always outperform you and that how you behave during the inevitable unsettling times will be the biggest determining factor in your lifetime returns. Owning businesses tends to increase potential returns, diversification tends to make the ride smoother, long horizons tend to increase the probability of positive returns, and above-average patience is a superpower.
Forecasts rarely match reality.
Outcomes do not always align with effort.
The story in our head doesn't always align with the story that unfolds.
Patience is the only way that I know to bridge these gaps.
Patience is to successful investing what the heart is to the human body.
When you see something that challenges the fundamentals of your own way of thinking - patience to lean in, listen to the facts, discuss them with a friend or colleague, and evaluate whether your beliefs still hold true.
When you see someone else experience investment performance that appears to outpace what you are experiencing - patience to acknowledge the discomfort it may cause without abandoning your own plan.
When the world seems to be falling apart at the seams and the value of your investments seems to be free-falling - patience to make an adjustment to the things you can control without getting overwhelmed by the things you can't control.
When a new idea is promoted as the "next big thing", but in reality it doesn't seem to create real value that will ever enhance our collective life experience - patience to wait for its day of reckoning to arrive without getting caught up in the hullabaloo.
When a part of your portfolio feels like dead-weight that needs to be pruned because of recent under-performance - patience to know that each investment will have its ups and its downs, and that recent disappointment does not necessarily call for permanent abandonment.
When a decision feels so urgent and important that you are becoming paralyzed by the moment and the stakes - patience to know that buying a little more time will likely bring more clarity, more information, and more ability to make a sound decision.
Patience isn't a cute virtue.
Patience isn't convenient to have in case of emergency.
Patience is the backbone of success.
Patience is a superpower.
Additional Reading
How long is forever? by Seth Godin
Stop worrying about investments, become a better investor by Carl Richards
Staying Put by Morgan Housel