Investing requires patience.
A long-term buy-and-hold strategy allows for fairly predictable results. The catch is that in order to earn those predictable returns, you have to stay invested for the entire period. Hopping in and out of the market might make your returns better, but it’s just as likely to make them worse.
Similarly, looking for immediate results can tempt you to try all kinds of high-risk investment strategies.
Moving your money around makes your results less predictable. Patience allows for predictability.
Investing requires humility.
The desire to be better than average often leads to poor investing decisions. It’s difficult for many investors to accept, but “average” (i.e., investing in low-cost index funds) is surprisingly hard to beat.
People often overcomplicate things in an attempt to make themselves feel sophisticated. In reality, the simplest investing strategy is often the best.
A little humility can go a long way when choosing an investment plan.
Investing requires confidence.
Being a buy-and-hold investor in a bear market requires ignoring not only your current account value, but also advice from countless “experts” and “friends” who will try to convince you that you need to take your money out of the market.
Ignoring the noise in a bear market requires a great deal of confidence.
Don’t want to be virtuous?
Fine. Being lazy and stubborn should get the job done too. 
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{ 2 comments }
I wish I’d written this! Really well done Mike.
Confidence? How is confidence going to do you any good? Does it bring rising stock prices?
If, instead you suggested: ‘Don’t panic;’ or remain calm when others aren’t,’ that’s a very different piece of advice. But having confidence is merely closing your eyes and hoping for a good outcome.
Hope is not a strategy.
I have a better idea. Instead of ‘have confidence,’ I suggest HEDGE. Reduce risk.
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