My Number One Mistake in Investing

One key toward prosperity is patience

I can consider myself lucky because I know investing since at the beginning of my bachelor. That was my lecture that thought me that. I really respect him, personally and professionally. While I am working in asset management today, he is still lecturing young students about economics and how to invest.

After three years leaving the school, there is one advice that I will never forget:

The hardest part about investing is patience. Many can do sophisticated valuation but very few have patience.

Turns out, that is still relevant today. I am in the industry where everyone wants to have a superior return in short term. I am in the industry where 1 month performance is much more important than 5 year performance.

It’s not wrong actually. It is just how it is. It’s just natural.

Pandemic somehow is the trigger of this behavior. People are staying home, having more time playing with their laptop or smartphones. It’s just normal for people to monetize those time. The rise of Robinhood making it easy for people to put their money into capital market without having adequate knowledge.

Again, that is not wrong. People just want to make extra money during the hard time. But the mistake is they are not having enough patience to see their investment grow exponentially.

Short term return shines brighter than the long one. That is common sense. But, if you want to have extraordinary gain, you need to do something ordinary people not doing.

Holding assets for long time, or people today called as diamond hand, is one simple step toward prosperity. By having enough patience, you don’t need to be smartest to be wealthy. You don’t have to be evil to have much money. What you need is trust your conviction and hold.