By: John Cox
Warren Buffett is unquestionably one of the greatest investors in the history of the United States stock market. While no one is right 100 percent of the time, his good decisions have significantly outnumbered his bad ones. In addition to being a great stock picker, he is very quotable. One of my favorites of his is: “The stock market is a device for transferring money from the impatient to the patient.”
Investing has always been about taking a long-term approach. This is easier said than done with the way we are all inundated daily with mostly negative news – whether it’s about the markets, the economy, politics, etc.
The investor who is able to ignore the “noise” can have a very successful experience and accumulate a sizeable retirement nest egg through years of compounding. Industry studies have shown that people who check their account balance frequently are more likely to observe a decline in value (on any given day, the stock market is almost as likely to be down as it is to be up), possibly causing them to make a short-term decision that will hurt them in the long run. Additionally, monitoring accounts on a daily or weekly basis may cause unnecessary anxiety and stress.
I’ll close with another Buffett quote, “Stocks are going to be higher, perhaps a lot higher 10 years from now or 20 years from now…I’m not smart enough to pick times to get out and get in.” Be a patient investor, and let time be your friend!
You can view John’s bio here.