Many of you have heard me say more than once “patience and discipline are by far the two most important ingredients for a successful investing experience”. Let’s take a closer look at these two words. Patience is the ability to wait for a long time without becoming annoyed or upset. Discipline is to train or develop by instruction and exercise, especially in self-control. I believe you need both of these attributes, not just one alone, to make for successful investing.
You first need patience to build discipline and then you need the discipline to stay focused and mentally strong when obstacles arise. If you’re persistent with your discipline you will continue to develop patience. See how these two work together!
Applying Patience and Discipline to Your Investment Strategy
Let’s think about this in terms of investing. At Claris, our investment methodology requires a long-term perspective. Therefore, you need the patience to endure the long-term trials and tribulations of capital markets to have a chance of a successful investment outcome. You also need the discipline not to let your emotions enter into the decision process while on this long-term journey, thereby eliminating speculation on prices or timing markets.
If you have a well-thought-out investment plan it will be easier to stay patient and disciplined throughout your investment lifetime. Remember, 10 years in the markets is not necessarily a long-time horizon. There have been multiple 10-year time periods where underperformance has occurred.
We are in a nice market cycle right now where we have seen some tremendous returns in asset classes that have been underperforming for around 10 years. In fact, for the last twelve months or so these asset classes have doubled the other asset classes, or even more in some cases.
At Claris, we believe that with patience and discipline you will have the ability to endure long periods of underperformance in the hope of achieving your financial goals. Contact Claris to see how our investment approach is designed to help you understand, invest and relax.