Stay invested for the long term is considered to be the prescription for better returns. We get this advice from almost everybody in every field of life, that everything takes time. It’s like a philosophical mantra. But at the same time many acknowledged philosophers say life consists of moments, so cherish every moment. Coz tomorrow never comes, it’s always the today. In totality, all the long terms have many short-term chapters in them.
Most successful people in any field, all play the long game. This practice is not particularly notable. It doesn’t attract a lot of attention. In fact, it not only looks boring, it is boring. The tiny gains accrued aren’t noticed until success becomes too obvious to ignore.
On the other hand, the short game is intermittent. It’s as if Sisyphus, pushes his huge boulder halfway up to a steep hill, gets tired, lets it roll down the hill, and says to himself “I’ll come back and do this tomorrow “. This is the human condition. Short term is seductive, visible, and offers immediate temptations and the longer you practice them the harder it gets. On a single day, it doesn’t have any impact, but as days turn into months and years the result is enormous. As tiny gains accumulate huge wealth tiny losses accumulate huge deficits, which gets noticed very late.
The long game is the opposite as you are paying a small price today to make tomorrow better. It looks pretty boring e.g., leaving the party early to get a sound sleep, eating healthy and staying fit, investing in your relationships every day so you have a foundation when things go wrong, spending less than you make, and many more…
Compounding is the magical ingredient in the secret recipe of LONG TERM which if we see holds the ground be it in Knowledge, Relationships, or Investing! The questions that surface with LONG TERM essentially are
a) How long is long?
b) How different will the ride be?
c) Is the result rewarding enough to take the pain?
Long is a combination of many shorts which are at times challenging or tough & at times tempting or rewarding as well and which, when handled well, add to brighter output or end result & avoid negatives. In Investing, we must realise that the mere fact that an investment is planned for a longer duration, doesn’t make it smooth or eventless. Rather, one has to face intermediate uncertainties and use them as opportunities to better performance. Another peculiar aspect is the flexibility in duration to accommodate any unforeseen unfavorable situation when your investment is due for maturity. Ultimately it all boils down to managing behaviors as how we react to a situation when it happens makes all the difference because Life is 10% what happens to you and 90% how you react to it.
The hardest part is sacrificing today for a better tomorrow. Every step we take is either short-term or long-term oriented. We can’t opt-out and we can’t play a long-term game in everything. We need to pick what matters to us. But in everything we do time amplifies the difference between the two. The question we need to think about is when and where to play a long-term game. A good place to start is with things that compound: Knowledge, Relationships, and Finance.
Happy Investing!
Team @ MintBox Advisory
DISCLAIMER: PLEASE NOTE, THE ABOVE NOTE IS FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS INVESTMENT, TAXATION, AND/OR LEGAL ADVICE. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME-RELATED DOCUMENTS CAREFULLY.
Mutual fund investments or Investments in the securities market are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns.
