Good Investing means
learning How to Wait
Patience is a highly sought virtue. To be patient is to
wait, to be able to mentally insert a wedge between a linked stimulus and
response and so place a stop on repetitive, habitual, often destructive behavior.
Patience gives you a moment to access, step back from the brink, and bring
yourself back into balance.
The idea is that we restrain our will to stop an impulsive or destructive action (often based on short term relief from tension or instant gratification) and in doing so, turn our energy in a constructive or creative direction – to use our will in a directly beneficial way. Patience, then, is the mental reflection of the restraint of will.
Dr. Gerald Epstein
The stock market is really a vehicle to help you master yourself. The money you make or lose is just a way of keeping score. The market can be insidious in taking advantage of your character weaknesses. But at the end of the day it is just reflecting back what's going on inside of you. And because of this it can help you master yourself as you learn about your own behavior under the fire of having your money at risk while being in the market.
Remember the first time you bought the stock of a listed company. It seemed surreal. There you were putting your money at risk in the stock market while facing an unknowable future. The 'uncertainty' of the future of the act tempts one to execute their idea immediately and in so doing relieve themselves of the tension of the moment. Afterwards the investor will use 'confirmation bias' to justify his action so as to make himself more comfortable with the idea of living with his decision.
There is no rush to buy a stock. The volatility of the stock market will offer the long term investor many opportunities to invest carefully. Rather than purchase a large position at once, there are advantages to building up a position over time. How you enter a stock position has a lot to do with how you exit the position. The practice of patiently building a position in a stock teaches the investor to be disciplined in holding the stock.
Incubate your stock ideas. When you think you have found an interesting investment opportunity. Sit on it awhile. Read about the company and its management team. Over time new insights will present themselves. It's human nature to jump in and relieve yourself of the uncertainty of the moment (will I or won't I). Let the investment idea develop on its own and allow it to enlighten you over time. You will find you were wise in waiting and when you do finally pull the trigger it will be a more sure handed response to the market environment.
The idea is that we restrain our will to stop an impulsive or destructive action (often based on short term relief from tension or instant gratification) and in doing so, turn our energy in a constructive or creative direction – to use our will in a directly beneficial way. Patience, then, is the mental reflection of the restraint of will.
Dr. Gerald Epstein
The stock market is really a vehicle to help you master yourself. The money you make or lose is just a way of keeping score. The market can be insidious in taking advantage of your character weaknesses. But at the end of the day it is just reflecting back what's going on inside of you. And because of this it can help you master yourself as you learn about your own behavior under the fire of having your money at risk while being in the market.
Remember the first time you bought the stock of a listed company. It seemed surreal. There you were putting your money at risk in the stock market while facing an unknowable future. The 'uncertainty' of the future of the act tempts one to execute their idea immediately and in so doing relieve themselves of the tension of the moment. Afterwards the investor will use 'confirmation bias' to justify his action so as to make himself more comfortable with the idea of living with his decision.
There is no rush to buy a stock. The volatility of the stock market will offer the long term investor many opportunities to invest carefully. Rather than purchase a large position at once, there are advantages to building up a position over time. How you enter a stock position has a lot to do with how you exit the position. The practice of patiently building a position in a stock teaches the investor to be disciplined in holding the stock.
Incubate your stock ideas. When you think you have found an interesting investment opportunity. Sit on it awhile. Read about the company and its management team. Over time new insights will present themselves. It's human nature to jump in and relieve yourself of the uncertainty of the moment (will I or won't I). Let the investment idea develop on its own and allow it to enlighten you over time. You will find you were wise in waiting and when you do finally pull the trigger it will be a more sure handed response to the market environment.
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