What can you do for minimal effort, time and knowledge better than most people that have far more effort, time and knowledge? Not a lot.
Most things in life require lots of time, effort and knowledge to become good at it. If someone is better than you at something, or more knowledgeable about something, chances are they have put in far more time and effort in order to acquire that level of skill and knowledge.
“Practice makes perfect”
“It takes 10,000 hours to master a skill”
“Luck is where hard work meets opportunity”
Yadda yadda yadda
We are taught from a young age the importance of hard work and consistently showing up. We are told it brings results. And this is true. Most experts in any field have put in countless hours to hone their craft.
But there is one area where this doesn’t apply.
Investing.
I’ve written previously on how poor active stock pickers perform vs those who invest in the index. Over my investing time frame I am confident that my clients will outperform over two thirds of investment professionals by basically doing nothing apart from the occasional re balance.
They should perform better than the majority of those that spend over 40 hours a week researching and talking about investments.
What other field can you say this for?
This is why it is so hard for so many to sit back and let their investments grow by doing nothing. It isn’t in our nature. We’ve been taught to work hard. We’ve been taught that action breeds results. We have a natural tendency to want to fix things all the time. We like being busy. It makes us feel better. More in control.
Doing nothing is hard! Although, hopefully we have all got a bit better at this thanks to Corona.
Fight the urge to tinker with your investments
When everyone around you is picking new stocks/funds, or confidently telling you which direction interest rates are heading, it can feel lonely to remain inactive.
It is easy to think you know more than you do.
It is easy to get scared and sell when you lose money.
It is easy to think you can pick the next big investment.
It is easy to blame poor results on situations outside your control, yet attribute good results to yourself.
It is easy to make decisions on recent events.
It is easy to equate higher price with higher performance.
It is easy to abandon plans.
It is easy to follow the crowd.
These are the actions that will result in under performance.
It’s hard to do nothing.
As long as you have the right systems in place where you have the right portfolio for your circumstances, then have confidence. Stop the tinkering just for the sake of it.
For once in your life, doing nothing will serve you very well. Far better than average for far less work. Don’t give up that less time- better results advantage.
If you need an investment plan or recommendations , then get in touch today.
The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here