Long-term success in the investment world is more about persistence than it is getting lucky. In regards to the stock market, time and patience are your most important assets. It takes courage to sit on the sidelines, watching and waiting for a good opportunity, but patience is almost always the best investment strategy.
If you know what you are looking for in a stock and a company, all you have to do is spend enough time looking, and, every so often, a great opportunity will just jump out at you.
Many individual investors just can’t wait to spend their money in the stock market. It’s like going to the shopping mall or to a casino. You save up some “play” money, you browse the day’s offerings, and you spend it all on a couple of long-shots, hoping to win it big. Some people just can’t resist “playing the market.”
The reality is that making money in the stock market isn’t that easy–if it were, there would be a lot more early retirees in your neighborhood.
The keys to success in the market are to take your time and speculate only on the most attractive opportunities. The best thing you can do is not rush into any positions; in fact, the best thing you can do for your portfolio is wait. In good markets and bad markets, if you are constantly looking, great investment opportunities will come across your desk.
It might be an exciting micro-cap company that’s growing fast, but still under the radar screen of the broader market. Alternatively, you might find a great large-cap company with a long-term track record of success that’s had a bad quarter and the stock has oversold. In any case, every minute you spend perusing the stock market adds to your skill as an investor.
My favorite investment analyst, Jim Rogers, used to say that his financial market success came from sitting on the sidelines, watching and waiting for only the best opportunities to occur. When only the best opportunities popped up, which met his strict investment criteria, he pounced on them. He would do nothing in the interim.
Consider time then as both your ally and best asset as an investor. If you only find six attractive stocks in a year, that’s a great success! Like most things in life, good things really do take time.