When investing, become a tortoise
When market volatility rises, people start questioning their聽. Should I go to cash? Should I invest more? Can I really stomach the amount of risk I thought I could?
But none of these is the question you should really be asking. That question is: How much time do I have to attain my goals?聽People worry about timing the markets when their true focus should be on聽time in the markets.
I can鈥檛 help but think of Aesop鈥檚 fable 鈥淭he Tortoise and the Hare.鈥� The energetic, fleet-footed hare makes fun of the plodding tortoise.聽Challenged to a race, the hare assumes he will win by a mile. But he鈥檚 overconfident and easily distracted, even stopping for a nap. Ultimately, slow and steady wins the race.
Trying to time the market is acting like the hare, jumping in and out of the race. It鈥檚 a risky strategy aimed at outsmarting the market.聽But as we all know, the markets do not act in a linear, logical manner.聽One mistimed transaction can cost you not only your initial investment, but also the potential upside. You run the risk of sitting on the sidelines, napping, during the best-performing markets.
With the increasingly free flow of information, much of it available instantly online, the notion of getting ahead of the herd on a trade is almost extinct.聽Are quick trades really going to get you to the finish line?
The tortoise, meanwhile, has his eye only on the win, not on the twists and turns of the course, nor even on his competitor. Your time in the markets should be dictated by your personal goals, not by what鈥檚 happening elsewhere in the market or by your neighbor鈥檚 portfolio. If you are聽聽in 20 years, all these fluctuations are just noise.聽Stay focused on your buy-and-hold strategy.聽This strategy 鈥� plus time鈥� has resulted in higher gains over the long run.
Buy and hold does not mean buy and forget, though. As your goals get closer, you鈥檒l want to rebalance your portfolio. But how you do it should be based on your needs, not the market.
The more haste, the worse the speed.聽This is not a race to the finish.聽Don鈥檛 be bullied by sensational headlines or the fear of being left behind as the market rallies.聽At the end of the day, perseverance and focusing on your goals will take you to the finish line in stride.
This article first appeared at
