Must read Truths about investing
✳️ 80% of gains come in 20% of the time. So an investor needs enormous patience and conviction to hold stocks or Mutual funds for 10 or 20 years.
✳️ Why not all investors get rich? They like to get rich without going through many years of discipline & patience. The process leads to the outcome.
✳️ An inferior strategy you can stick with is likely to produce better results than a superior strategy you cannot stick with.
✳️ Prices change frequently. Value change over a period of time. There lies the opportunity.
✳️ Compounding is backloaded. It works well only over a longer period of time. There is no substitute for time in compounding.
✳️ 99% of the time, doing nothing is the best thing to do in the market. Activity hurts. Sit still.
✳️ You cannot predict or control markets. What you can control is how much you save, investment process and behaviour. Focus only on that.
✳️ Random outcome doesn’t invalidate the need for a process. Sound process and consistently sticking to the same increases the chance of luck.
✳️ Investors are human. That’s why markets would never be fully efficient.
✳️ Markets usually run ahead or fall behind. Rarely in equilibrium. Over or under valuation can last for long time. Don’t time the market.
✳️ Buying and selling is easy. It is holding on through ups and downs is difficult but ultimately most rewarding.
✳️ Tiny drops of water make the mighty ocean. Invest regularly. Invest for the long term. You can create huge wealth.
✳️ Not investing in equity is riskier than investing in it. Remember, you need to beat inflation and retain your purchasing power.
✳️ We see past bear markets as missed opportunities. However, thinking of future bear markets is gut-wrenching. Strange investor psyche.
✳️ If someone keeps reviewing the value of his house every day, we may suspect his mental health. But that’s what we keep doing with our equities.
✳️ Equity investments are subject to behavior risks. Always keep a check on your emotions while investing.
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