Learning Patience (And Investing) From A Bird

One very important key to successful investing is patience: The ability to think and invest for the long-term.

My colleague, Chong Ser Jing, has talked about how patient investing can pay off. You can read some of his thoughts here  and here. One of his examples shows how the odds of making a loss in Singapore’s market barometer, the Straits Times Index (SGX: ^STI), had fallen rapidly with an increase in the holding period.

A holding period of one day means it’s a coin-flip for you when it comes to making a gain,” Ser Jing wrote. But “when we look back in time, the Straits Times Index has never delivered a loss for an investor with a 20-year holding period.

I recently saw a documentary that reinforced the true importance of patience.

Have you ever seen a bird build its nest before? The documentary showed a bird building a nest in preparation for starting a family and for its offspring. Over a month-long period, the bird built its nest, painstakingly. It is a painfully slow process as the bird can only move things with its beak. So, to form its nest, it had to pile on one stick at a time, one feather at a time, and one pinch of mud at a time…

The bird even had to endure damages during the nest-building process, because of events like strong winds or a predator-attack. But admirably, after each disruption, the bird just restarts its nest-building, as though nothing had happened. It simply keeps on adding one stick after another. And finally, it was done. The painfully long process was completed. The bird has a nest and a home.

In a way, I could have been describing the process of an investor building up a sizable portfolio for retirement. There would be little difference. (It’s amazing how there are so many similarities between nature and investing.)

As investors, you would need immense patience as you build your portfolio. Along the way, you would meet disruptions. Bear markets. Recessions. Fraud cases. Falling profits at some of your companies. You might even make a mistake and suffer a big loss.

Yet, I believe the best thing for us to do is to keep moving forward and continue to build our portfolio, one good stock at a time.

If you have been hit badly by the recent market collapse – and it has been a bad one with the Straits Times Index down by over 25% from a 52-week high – stay strong. Although the wind is currently stronger than usual, I believe you could weather the storm if you are patient enough (and if you had built a portfolio with good businesses!), just like the little bird.

Sooner or later, you would have a sizable nest as well.

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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 does not own any shares mentioned above.