Investors: Time Is Your Ally, Not Your Enemy

Time Is an Investing Ally, Not an Enemy
Doing nothing might produce better returns.
Bloomberg, August 13, 2015

 

 

Today’s column is going to wax a bit philosophical. Stay with me; I think it will be worth your effort.

You don’t really understand time. By “you” I mean humans in general.

This has great significance for investors. They often misapprehend time, are seemingly unaware of its importance, and can’t conceptualize it over the long term. Pardon the circularity, but you exist in the here and now, and — for want of a better phrase — are stuck in the short term.

The past is a hazy set of fallible memories, biochemical impulses, often tinted by the warm and rosy glow of nostalgia. The past can also be darker, traumatic, painful, repressed, still haunting its survivors. Those experiences, often mixed up with one another, color our perspective.

It’s no surprise that our experiences affect expectations for the future. Nor does one need much imagination to see the ramifications the past has for investors. Too many good experiences, or too many bad ones, will change the expectations and risk tolerances for those who put capital to work in risk assets.

 

 

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Originally Time Is an Investing Ally, Not an Enemy

 

 

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  1. noncist commented on Aug 13

    This is somewhat tangential to your words of wisdom, but I love this sentiment I came across recently:

    Money isn’t everything, but your time is.

Read this next.

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