Patience is Not Only a Virtue but Can Help Generate Wealth!

August 25, 2015 3:39 pm

Hi all,

It’s all happening again on the stock markets……again!

I’d like to make one point clear – Its perfectly fine to feel nervous, anxious, uneasy, or even scared about what’s going on, but it’s not OK to react irrationally to it.

I usually tell people who are investing for the long haul that they should not listen to what the media is saying because the information is very short term and does not necessarily have any relevance to their long term plans. The only people who should watch and listen to everything that is broadcast and published are the ‘traders’ (the people who buy and sell shares on the short term trying to make quick returns) as opposed to the ‘investors’ who have a long term strategy. However, today I found an article, which includes a video by Michael Pascoe, in his “BusinessDay” column for the Sydney Morning Herald, entitled: “ASX: Don’t follow the herd but watch out for opportunities”. I am not advocating market timing here, however, he makes some sound points about patience, the danger of following the herd, and “that we should buy shares the same way we buy fruit and vegetables: more when they’re cheap and less when they are expensive” (interestingly, this is what ‘dollar-cost-averaging’ does – as one regularly contributes to their investment on a monthly basis – a strategy that we have advocated for the last 16 years of practice).

Please take the time to watch the first 2:25 minutes of the video by following the link in the above paragraph.

Warren Buffet, one of the worlds greatest investors, made this wise comment on wealth: “Wealth is the Transfer of Money from the Impatient to the Patient”.

As always, please feel free to call to discuss how you are feeling about what is happening in the markets and how you may be affected.

Lastly, if your goals haven’t changed it is highly unlikely that your strategy and investments need to either.

P.S. Based on what I saw reported on the FSTE (-4.67%) and the Dow Jones (-3.57%) this morning, I expected to see the Aussie market get smashed again. However as of 1:25pm today, the S&P/ASX 200 is up 2.18% and the All Ord’s is up 2.03% – Go figure! This is why reacting to short term information can be unwise.