Being a successful long-term investor is not just about numbers and spreadsheets; it’s a journey into mastering your mindset. Akin to a chiseled sculptor with a slab of marble, you must hone your instincts and impulses, fighting against a genetic predisposition towards short-term gains that may often lead you astray. Understanding this potential flaw offers you an invaluable advantage, the cornerstone of a skyscraper called success.
Think back to when you last spotted an investing headline that screamed, “Got $1000? Make these 5 Moves NOW” or “This is why you should be WORRIED”. How did it stir your psyche? You might have simply scrolled past, but these silent sirens, constantly clamoring for your attention, have one key aim – to nudge you into action, make you doubt your strategy, and play on your fears.
But let’s face the truth: even the most adept investors aren’t immune to occasional stumbles. You’ll likely make a few bad buys and feel a pinch of discomfort. But fret not – these are but stepping stones in your journey. Accepting these inevitabilities is the first step towards focusing on what truly matters. Your quest to successful long-term investing entails training your mind like an Olympian, crafting habits that act as a sieve, filtering out the noise and extracting valuable lessons from every misstep.
How about this paradigm shift? Next time you brood over a trading blunder, balance it out by toasting to a fruitful trade. It not only highlights the positives but also reminds you of the valuable lessons woven into each success. We rarely pause to celebrate our victories. Let’s change that.
Searching for the Golden Hour
Many investors are laser-focused on pinpointing the absolute ideal price to hop onto a company’s stock. But remember, as a long-term investor, you’re in this for the marathon, not the sprint. The difference between buying a stock at $70 versus $72 may seem significant today, but fast forward 10 or 15 years, and it likely won’t even be a blip on your radar.
Ever experienced the gut-punch of watching your newly purchased shares tumble by 5% the very next day? It’s easy to start doubting your research, wondering if you overlooked some crucial detail. But before you rush to sell off your shares, hold your horses! Pause, reevaluate if there have been any significant changes in the business. Most often, you won’t find any rationale for the drop. Be patient. Allow your picks to simmer and mature. We recommend allowing at least a year for feedback.
Here’s the crux of the matter: The ‘what’ matters more than the ‘when’. Spend your time wisely by focusing on finding robust companies, regularly revisiting those you’re already invested in. Dive deep into their operations – watch interviews with their executive teams, peruse SEC filings, explore their Github pages, and even experience their actual products. That’s the real essence of long-term investing.
Sailing Smoothly: Avoid the Choppy Waters
Successful investing shouldn’t feel like navigating through a storm. We strongly believe that avoiding unnecessary stress forms a significant part of your investment journey. Whether it’s obsessing over price optimization or compulsively checking your brokerage account multiple times a day, it’s crucial to identify and eliminate these stress-inducing behaviors.
Doing so can transform you into a more efficient investor, empowering you to make well-informed decisions, react appropriately to relevant news, and steer clear of knee-jerk reactions. Moreover, this tranquil approach extends beyond the realm of investing, influencing your overall life experience.
Knowing Your Partners in Profit
As a long-term investor, each company you invest in should be more than just a ticker symbol. It should be a business you believe in, a part of a grander investment thesis. You’re essentially becoming a part-owner, so it’s crucial to keep an eye on how your businesses are performing. We understand this can be a monumental task, depending on the number of companies you’ve invested in.