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The Most Important Attribute to Have in Investing

Ever wondered what makes great investors, well, great? If we look at all the great investors throughout history, there are certainly a number of similarities that they all share. Some common ones include: Being confident independent thinkers; and not being easily affected by market fluctuations. But, there is one quality that is more important than any other.

Patience is a virtue 

Successful investors tend to have more patience than others. They know that their investments might take years before they see any results. This seems to be what’s lacking in the current investment community. Since everyone is ‘connected’ all the time (yes – that’s you, the smartphone!), information is easily available in real time. As such, there is a tendency for investors to demand instant gratification.

Not all good investments are the right investment

The truth is, knowing that patience is important and actually practicing it are two very different matters.

Imagine you have bought into a company hoping for a turnaround in the industry. After many months, the shares of the company you’ve bought into have sunk further and further. The funny thing is, when you look at the company’s business, there are clear signs that it is indeed slowly working its way out from the downturn. At the same time, you have the entire share market (except your shares of course!) climbing slowly even as your company’s sinking.

The question now becomes: Will you be able to withstand the mental pressure that comes with your company’s declining share price in addition to the attraction of the general market upswing?

You might find the above hypothetical scenario weird – but it’s something that happens often enough in investing! And, it is not easy to resist selling your shares for seemingly greener pastures elsewhere.

However, you need to know that you do not need to buy every single good investment out there; the market is big enough for you to find our own niche within it. It is more important to stick to investments you are comfortable in and have a good understanding about. And by sticking to your knitting, if you have patience on your side, you might just be able to see the rainbow after the rain.

Ultimately, we have no control over market fluctuations over the short term. But, we can control our reactions to these fluctuations. Great investors are patient and often see their shareholdings decline in value greatly despite having improving business fundamentals. But, they don’t cave in to the pressure and sell – they hang on for the ride and are ultimately rewarded. That’s something we can all learn from.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.