The Rich Rewards of Patience
As much as we all wish we could make big money quick in the stock market, that is not how it goes for 99% of market participants. Thankfully, most of us invest because we are motivated by the idea of reaping big gains over many years. But, sad to say, many investors come to find out that even after years of investing, the returns just aren't there. While no two investors are alike, human behavior tends to be consistent and most humans, for better or worse, are impatient creatures -- and, tragically, impatience is the enemy of the stock-market investor. When emotions are running high, investors "zig" when they should "zag."
It's been often said that investing is easy to do but not simple to do. What this means is that anyone can buy and sell stocks -- that's the easy part. The not-so-simple part is in understanding the business, knowing what value you are getting for the price paid -- and, most important, keeping your emotions in check. Make no mistake, being a patient investor is not a rallying cry for buy-and-hold investing. There are a lot of flaws in the concept of buy-and-hold. If a company deteriorates, it should be sold, not held. But that's a decision made for rational reasons, as opposed to emotional ones. On the other hand, when a great business suffers a 10% share decline because it missed earnings-per-share estimates by a penny, that's emotion at work. Instead of following the crowd, a shrewd investor should act independently....460 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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