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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Posted by Muthu on March 5, 2017

“The biggest thing about making money is time. You don’t have to be particularly smart; you just have to be patient.”- Warren Buffett

Philip Carret was one of the great investor who was admired by Warren Buffett. Buffett once said that Phil has “the best long term investment record of anyone I know.”

He was an investor for eight decades and died in 1998 at the age of 101.

It is said that he has personally experienced 31 bull markets, 30 bear markets, 20 recessions and a great depression over the above 8 decades.

When he was at age 98, in an interview, he was asked:

“What’s the single most important thing you’ve learned about investing over the past three-quarters of a century?”

His answer: “Patience.”

He followed buy and hold philosophy and rarely sold his holdings.

He gave time for his investments to grow multi-fold. He was extremely patient and did not get disturbed by the market volatility.

He once said that investing genius consists of one part patience and one part compound interest.

So what is required for investment success is time and patience, as long we don’t do anything stupid. We need not be smart. But we should not be stupid as well.

If you stay invested in a 12 or 15 quality companies or few good diversified equity funds, you are bound to do well over next one or two decades. Minimum 10 years is required for compound interest to make meaningful impact to your net worth. More the years, better the result would be. Changes though cannot be completely avoided, have to be minimum. Frequent decisions lead to more errors. Fewer decisions, buying right and sitting tight works extremely well in investing.

Market cycles are a reality. A bear market is always around the corner. Every bear market has to be used as an opportunity to develop patience.

God willing, if we live long, we would be astonished as to what an impact time and patience can have on our equity investments.

Patience is not easy and is a rare trait in the markets.

Who said that making money is easy or common?

Develop patience and give time to your investments.

Be ready to get amazed with the outcome.

2 Responses to “Patience”

  1. Jay said

    Mr.Muthu,When should one start spending the saved salaries without worrying about more earning and more savings? Your thoughts please.

  2. RVS said

    In the Indian context, the main aspect that scares an investor is the lack of trustworthiness of our businesses
    Already the Banks have been looted, funds are being siphoned out from projects and one doubts the integrity of professionals such as CA and corporate lawyers
    Did Phil Carret and or Warren Buffett encountered such environment in the USA economy over their investment career?
    Perhaps we need to think differently and that is why people take short term view knowing the business ethics and regulatory incompetance that persists with no end in sight

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