The simplest formula for investment success is to follow the three “P’s”:
- Perspective: markets go up and down and this too will pass (good or bad).
- Persistence: long journeys require putting one foot in front of the other and sticking with it.
- Patience: raising kids, planting gardens, learning a new skill and investing all require patience.
And the hardest of these is patience.
“Never cut a tree down in the wintertime. Never make a negative decision in the low time. Never make your most important decisions when you are in your worst moods. Wait. Be patient. The storm will pass. The spring will come.”
— Robert H. Schuller
The title of this post was the title of an intriguing article that ran in a “New York Times Magazine” article over the weekend. The article opened with this line:
“Lots of people pretend they’ve got tomorrow figured out: tech gurus, politicians, C.E.O.s and (yes) journalists. But if we’re really honest with ourselves, the view ahead of us has never been murkier.”
We say “amen” to that.
And to the list of people who pretend they have the future figured out, we would add many investment advisers, mutual fund companies, Wall Street “experts”, television commentators and print media gurus.
Here is a basic fact that makes investors uncomfortable: THE FUTURE IS UNKNOWABLE. No matter how smart you think you are, no matter how much time and effort you put into reading the economic reports, no matter what degrees you hold, THE FUTURE IS UNKNOWABLE.
The sooner you accept this fact and plan your investments accordingly, the sooner you will have success.