The Day I Asked My Portfolio To Slow Down

We live in a fast-paced world, and with each day it seems like it is becoming even faster-paced. With technology connecting us 24 hours a day, 365 days a year, it almost seems like if we slow down, the world will pass us by. We have grown accustomed to getting what we want almost instantly. All the information that we would possibly want, instantly at our fingertips. We shop online, and expect quick delivery. We get annoyed if the car in front of us takes too long to drive off after the traffic light changes from red to green.

It seems like this new world has taken away our patience. We expect everything we do to bear result instantaneously. Many times when I tell people that they should plan their investment in term of decades, I get a blank look as if I am an alien. When I asked in return what is their version of “long-term”, the most common response is “6 months to a year, because I need to roll my money”.

I never quite understood where the money is rolling to. Since I can’t possibly be asking people where they are rolling their money to, to this day, it remains a mystery to me. This “I want it fast, I want it now” syndrome seems to indicate that many investors still views the stock market as a large casino; a casino that should reward or punish you straight away.

I believe that investors should view your investment in a different light. I believe that instead of asking your portfolio to speed up, we should be asking it to slow down.

Why are you investing?

For the most of us, we are investing for the future. Maybe we need to save up for our children’s education. Maybe we are saving to upgrade from a HDB flat to a condo. Or we are looking forward to retirement and enjoying our golden years. Whatever reason you need the money for, some of big ticket items will only materialise at least a decade away. This means that from now till then, you will be a net buyer of stocks as an investment.

If you are planning to buy something for the next 10 years, would you not hope that prices remains low for you for the next 10 years? If you portfolio is moving fast and everytime you buy something it will generate a significant gain for you, wouldn’t you run out of things to buy after a short time? And if prices rose so high that make you uncomfortable holding on to your investment, wouldn’t you have to sell them even before you are ready to spend that money?

Foolish Summary

In the long run, share price of a company would follow the earning ability of the company. As long as we are confident in the earnings ability of a company, we should not be worrying too much about what the share price is doing in the short term. In fact, we should be hoping it stays as low as possible. We should be asking it to slow down, and not speed up.

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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 writer Stanley Lim doesn’t own shares in any companies mentioned.