Two investing quotes and two questions to consider on your journey to wealth creation.
Our weekly post providing investment quotes, insights and advice from the best thinkers in philosophy, finance and business.
“You can usually accomplish more by giving something your full effort for a few years rather than giving it a lukewarm effort for fifty years.”
Our investing strategy dictates that we hold stock in 25 companies for one year regardless of profit/loss. This is the maximum amount of time the strategy permits for the realization of value. With such a condensed holding time, the strategy requires a commitment of at least three years to see the true compounding power.
Nothing works all the time. In some years the types of companies we like are out of favor with the overall market. During those years, however, we don’t switch up our strategy and start seeking glamorous overpriced companies trading at high multiples.
At least three years of consistent application is what is required to assess the merits of the strategy.
No lukewarm effort.
“Your work ethic will help to eliminate fear. As you put forth the work, fear will gradually diminish.”
Investing in the stock market as a retail investor can be a very clear, non-stressful way to compound and build wealth but many investors get in their own way through unchecked fear. Crowd based fear is powerful. The crowd’s fear can often overwhelm your good ideas.
Being influenced by the crowd makes investors fall prey to financial euphoria over the next hot company to IPO, panic sell in response to short-term bad news and a number of other behaviors that slowly erode returns.
Don’t be mistaken – buying and selling with the crowd is fear masquerading as wisdom. Once you have a clear strategy for buying and selling, you can allow the market to work for you. It’s also more rewarding to take action on your idea and then watch as the crowd arrives to where you already were.
Two Questions to Consider:
- How comfortable am I with the source of my investment ideas?
- How can I improve the source of my investment ideas, in order to diminish fear?
We hope that you have enjoyed the investing quotes and questions for the week ahead. As always, keep it simple.