The ninth idea to improve your investment process is to be (more) patient.
The great investor Peter Cundill, who died earlier this year and whose fund achieved 15% returns for over thirty years, stated that the most important attribute for success as an investor is being patient and that most investors don’t have it. The importance of patience is frequently cited by other great investors.
No investment process – even the best – outperforms in every period. This is asking too much given the amount of external factors that affect performance.
Patience is not only required of long-term investors. Even frequent traders must have conviction in their investment process and have the patience to trade through the inevitable draw-downs.
In short, investors cannot escape the requirement of patience or they condemn themselves to mediocrity or failure. Without patience, you’ll abandon your current approach only to chase the next investment fad, only to see it take an inevitable downturn.
Can patience be learned? I think it is one of the fruits of a good investment process. The better your process, the greater your conviction to stay with it long enough to bear fruit. This is the only sensible approach to building a consistent record of good performance.