Wait Patiently and Grow Rich

Published by Bryce Foster on

The biggest challenge of of investing is waiting. 

 

I was recently forwarded an email from these guys the Mutiny Fund (https://mutinyfund.com/)

 

Times of crisis are when people generally start looking for alternative investments and ideas to protect their portfolios (or start one even).

 

I read through several of their articles, and particularly liked their 100 Year Portfolio article.  The idea behind a 100 year portfolio is to keep you from chasing the latest ‘shiny object’ of investing and stick to things that will actually exist in 100 years ( most major corporations that are popular today probably won’t).

 

It’s interesting stuff, and it’s classic ‘tail hedge’ investing.  If you aren’t too familiar, read Antifragile by Nassim Taleb and the Dao Of Capital by Mark Spitznagel

 

With the market chopped down significantly, there are not doubt opportunities to buy.  And buy you could. That’s actually the easiest part.

 

Where most investors struggle (and I certainly have in the past) is being able to invest in a way that you can sit on trades for the long haul and actually reap the maximum gains.

 

A few quick tips if you’re buying stocks.  Firstly, buy companies in good financial health (low debt to earnings) and that pay a dividend.  The first part helps ensure that they’ll be around long enough to prove your bet right, and the dividend helps you feel better about the price not moving as quickly as you expected.

 

Also, make sure you buy small enough, and with money that you won’t need later down the line.  In times like these a lot of people are selling because they HAVE to. They need to pay the mortgage, their student loans, the car loan, whatever.  Only the guys and gals that have plenty of emergency cash to weather storms can leave their portfolios untouched. 

 

Set yourself up to play the long game by buying smart, and being able to wait for your positions to win big.  The market could trade down for the next two years, are you in a position to be able to keep buying good deals throughout that entire time?  

 

Bryce

 

PS More investing ideas and thoughts coming this week. 

 

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