Investing: Points to Ponder



We have no ability to avoid down markets. We stay invested through both ups and downs with conviction that equity does wonders in long term.

It is better to be optimistic always. But many get optimistic at peaks and pessimistic at troughs. Sure way to lose money.

Time arbitrage is your greatest edge. When most investors focus on short term, ability to focus on long term is a huge competitive advantage.

Even if tempted with super normal returns, don’t abandon the approach which works for you and able to stick during both good and bad times.

Luck plays a major role in outcome. But better your process and discipline, greater is the chance of luck leading to good outcome.

Look for long term track records. Returns from short term, especially during bull markets, conveys very little about the quality of process.

Bad is to live from paycheck to paycheck. Worse is spending in anticipation of future paychecks.

Market does not determine your fate. Your behaviour does.

Avoiding debt is the cornerstone of wise money management.

Traits like delayed gratification, patience and discipline need not be inborn. They can be learnt, put into practice and made as a habit.

Other than regular needs, better to postpone our wants by a month and see if we are still interested. This would prevent impulsive buying.

Save money during your working years so that money can save you during retirement.

Plan in such a way that you work for money for two decades and the money works for you for rest of the life.

You need not make money every month or every year. This expectation leads to disaster. Buy and hold knowing that gains are always lumpy.

Trying to make money in short term would prevent building good wealth over long term.

Knowing what to avoid is very important in investing. Avoid many wrong things, do few right things and then just stay the course.

Avoid investments with lock-ins. Hold long because of discipline and not due to compulsion. Never give up liquidity and transparency.

Discipline and patience scores hands down than intelligence in investment success.

For some, the only investment strategy seems to be making money faster from stocks. This is unviable and would lead to ruin.

Whether it is career, wealth or health, thinking long term and avoiding instant gratification is the key to success.

Businesses which take long term decisions even if it means short term pain deliver greater wealth to shareholders.

How much ever you develop knowledge, there would be many better than you. If you develop emotional balance, there is very less competition.

Overreaching for returns many a time ends in wealth destruction instead of creation. Instead of quick, focus on sustainable wealth creation.

Don’t look only at returns, especially short term. Look at the quality of process. Long term outcomes are primarily determined by process quality.

Mutual funds are best option for those who want to harness the power of equity but may lack time or expertise in stock picking.

Happy Investing !!!




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