As someone I look up to put it recently – “It’s a game of patience and nerves!”
The long-term investor.
Do you have any?
Patience, or nerves, or both?
Well, then you’ll do well in the markets, over the long-term.
We look for complication. Meanwhile, we forget the basics.
These are basics.
If you’re not patient, you’ll for example jump into a stock at the wrong time, or you’ll jump out of it too early, or what have you.
If you don’t have patience, well, develop it.
If you can’t, do something else instead. Trade. Don’t long-term-invest then.
If you cannot develop patience, you are not cut out to be a long-term holder.
One method to cause the tree of patience to grow in you is to create the correct environment.
Just don’t do anything that will make you jump.
Invest your sur-sur-plus, money that is then pickled away, money that you won’t miss, yearn for or require over the very long-term.
Go in with margin of safety.
Stay in a stock you’ve singled out and entered until there’s a glaring reason to exit. Try to exit upon a high. This is the market. Highs are its nature. So are lows. That means that highs come. Wait for them to come, to exit from anything you need to exit from.
Nervers, well, they come into play if you’ve not invested with margin of safety.
I do remember two instances though, where everyone’s nerves were tested. October 2008, and March 2009. At these times, stocks sold for a song. Good ones and bad ones alike. Fear did the rounds, extreme fear. That’s what fear does. It creates once-in-a-lifetime opportunities. Take them. Maintain a clear head. Your nerves of steel will do that for you. Create an environment for your nerves to become strong. Or, perhaps expressed another way, create an environment where any weakness in your nerves is not required to show itself, and gets subdued into extinction.
Again, just go in with your sur-sur-plus. You’re not going to miss this money even if the sky is falling upon your head. And you’ve gone in with margin of safety. Your nerves will stay intact.
Ensure your basics. Allow them to shine.
The rest will take care of itself.
Good investing. 🙂