Hard work leads to success, we all know that. The better you perform at work, the more chances you have of getting a promotion. The harder you work out in the gym, the more fit you are. The harder you save, the better holiday you get. Day-to-day focus on your target gets you the best results, right?
Not so much in long-term investing.
The Chinese philosophy of Taoism has a phrase: “wei wu-wei”, which translates to “do without doing”. This is a valuable lesson when it comes to your investments: constant tinkering will not help you.
This philosophy however is not about doing nothing. As an investor, whether you have a personal portfolio or you are a KiwiSaver member, you should focus on things you can control. Always evaluate your personal circumstances and your appetite for risk, try to diversify your portfolio, be mindful of the impact of fees and keep a long-term view even when the market goes down.
Some people get caught-up in day-to-day stuff, making calls based on past performance or making impulsive decisions from news events that turn out to be noise. Be wary, successful investing is a marathon, not a sprint. To quote Warren Buffett “Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.”
It’s important to regularly monitor your investments and make any necessary adjustments. But your review needs to be a disciplined and premeditated activity based on your personal circumstances.
When you plant an apple tree, you choose a sunny spot with good soil and water. Apart from regularly pruning, you leave the tree to grow. The same goes for your investment – leave your investments to grow and when the time comes you’ll get to enjoy the apples.