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Investing for the Long Term Can Bring Success

Investing for the Long Term Can Bring Success

March 24, 2023

Two important ingredients to successful investing are patience and taking a long-term perspective, writes Peter Watson.

One of the most important attributes to successful investing can be found in what you don’t do.

Unfortunately, this flies in the face of how humans are programmed. We are taught from a young age to be proactive.

When it comes to investing, financial firms profit from proactive behaviour. You buy 20 stocks, and the firm earns income from making the trade.

Then you’re proactive and sell some of those stocks, add cash to some existing positions, and finally add a few more stocks to the list.

You are being proactive. The investment firm is delighted and continues to earn money by providing this trading service.

Be patient. If you are a long-term investor and therefore have a long-term time horizon, give your investments a chance to perform well over time.

This assumes you have a well-diversified investment portfolio. If you just own a small number of stocks, in my opinion, you are a speculator and these general suggestions of how to invest do not apply.

Many years ago, a large mutual fund firm in the US compared the investment results of clients that did not actively monitor their portfolio.

The result: investors that were not receiving their statements and therefore not closely following the success of their investments had higher rates of return than those that received their statements on a regular basis.

Our recommendation. Be a patient long-term investor.

Peter Watson is registered with Aligned Capital Partners Inc. (ACPI) to provide investment advice. Investment products are provided by ACPI. ACPI is a member of the Investment Industry Regulatory Organization of Canada. The opinions expressed are those of the author and not necessarily those of ACPI. Only investment-related products and services are offered through Watson Securities of ACPI. Peter Watson provides wealth management services through Watson Investments. He can be reached at www.watsoninvestments.com